What type of loan is generally characterized by lower amounts and high costs?

Payday loans are typically characterized by low principal amounts and high costs due to their short repayment periods and high interest rates. These loans are often marketed to individuals who need immediate cash to cover urgent expenses, making them appealing despite their costly nature.

The costs associated with payday loans can be exorbitant, often exceeding the principal amount borrowed when interest and fees are considered, leading to a cycle of debt if borrowers are unable to repay on time. This type of loan is typically due by the borrower's next paycheck, which is why it's usually classified as a short-term borrowing option.

In contrast, revolving credit allows for larger borrowing amounts with more flexible repayment terms, while installment credit involves larger loans that are repaid in fixed amounts over time. Advance loans can also vary significantly in terms of amounts and costs, but they are generally not characterized in the same way as payday loans.