The answer lies in the fact that cheap payday loans entail a lower finance charge than other cash advance loans. However, it should be noted though that in general, there is only a slight difference between the fees of low-cost payday loans and those of regular ones.

For instance, a regular payday loan has a finance charge that is 20 percent of the loaned amount. If an individual takes out a loan worth $100.00, he is required to pay $120.00 when he receives his next salary.

On the other hand, a cheap payday loan has a finance charge which is one or two percent lower compared to that of a regular one. So going back to the previous example, the individual would be paying a total of $119.00 or $118.00 if he borrows money using a cheap payday loan. Although it may seem somewhat trivial, the lower fees offered by this type of payday loan can become more significant when larger sums of money are involved.