Are payday loans safe? In short, yes they are. The confusion comes when considering the terms and rates. Payday loans have high interest rates due to the small amounts and short terms of the agreement. As the loan is supposed to be paid back when the client receives their next pay check, clients who default will rack up quite a large amount of interest, quickly. Dealing with amounts ranging from a few hundred to a few thousand, these loans are to get you through unexpected costs during the course of the month. They are perfectly safe, however need to be taken seriously and paid back in due time otherwise they can work against you.