Payday loans are tempting. Advertisements promising money to "tide you over until your next paycheck" appear at check cashing outlets, in pawn shops and within the classified ads. Increasingly, cyberspace is the new marketing frontier for payday loans with check-based lenders promoting their services through pop-up ads, in junk e-mail and on Web sites, according to Pamela King, president and CEO of the Mountain States Better Business Bureau.

Small, short-term, high-rate loans are marketed under a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.

To obtain a payday loan from a storefront lender, a consumer writes a check payable to the lender for the amount he or she wishes to borrow plus a fee. The lender gives the borrower the amount of the check, minus the fee. The lender then holds the borrower's check until his or her next payday, when the borrower can do one of three things: allow the check to be cashed, redeem it by paying cash to recover the loan plus a fee or roll it over by paying the fee to extend the loans for two or more weeks.

If the borrower chooses an Internet payday lender, the loan is applied for online and funds are delivered and collected through electronic fund transfers between the lender and the borrower's bank account. The loan is based on electronic access to the borrower's bank account.

With Internet payday lending, consumers are encouraged to apply and receive loan funds deposited overnight in their bank accounts by filling out online applications and/or faxing applications and support documents.

In addition to high credit costs, which may not be openly disclosed, consumers who shop for payday loans online face other challenges. Lenders may be hard to locate or impossible to contact. Some hide behind anonymous domain registrations or may be located outside the United States. The borrower can face difficulties communicating with Web lenders regarding any questions they may have or to resolve disputes that may arise.

Before going online to make a loan, or for information on any lender with whom you contemplate doing business. check with the Mountain States Better Business Bureau online at www.mountainstates.bbb.org, or call 800-564-0371.