DEFINITION of 'Postdated'

A postdated check or draft will display a future date on it. A check user will often write this in to specify that s/he does not want to withdraw the amount of the check until the date specified. (For example, if Mike writes a check on the 14th of January, but postdates it for the 28th, the bank will not cash the check for another two weeks.)


Article 3, Section 113 of the Uniform Commercial Code (UCC) outlines the rules for postdated checks. (Adopted by nearly all states in the U.S. the Uniform Commercial Code is standard set of business laws, regulating financial contracts. The UCC better enables lenders to loan money, secured by a borrower's personal property.)

Postdated Checks and Payday Loans

Customers who take out payday loans frequently use postdated checks, which most banks will honor.

A payday loan is a form of short-term borrowing, which many regard as very risky. In a payday loan an individual borrows a small amount (usually $100 to $1500) at a high rate of interest. (For example, $17.50 per $100 for seven days can translates to a rate of more than 900% on an annualized basis.)

A payday borrower will typically write a post-dated personal check in the amount she or he wishes to borrow, plus a fee, in exchange for cash. The lender, who initially delivered the cash to the borrower, will cash the borrower’s check on the agreed upon date. This usually occurs on the borrower's next payday.

Most borrowers, using payday loans, have poor credit and low incomes. They may not have access to credit cards, forcing them to use the services of a local or regional payday loan company. To add further risk, payday loans can be rolled over for additional finance charges.

Many know payday loans as cash advance loans, check advance loans, post-dated check loans, deferred deposit check loans, and/or quick cash loans.

Additional Risks Related to Postdated Checks

Since a time lag exists between when a person writes a postdated check and when a banker cashes it, sensitive information can remain exposed and vulnerable for days, weeks, even closer to a month. The opportunity for identity theft is high. Identity theft occurs when someone obtains personal or financial information of another person in order to assume that person's identity to make transactions or purchases. 

  1. Guaranteed Loan

    A guaranteed loan is a loan guaranteed by a third party in the ...
  2. Bad Check

    A bad check is a check drawn on a nonexistent account or on an ...
  3. Check

    A check is a written, dated, and signed instrument that contains ...
  4. Commercial Loan

    A debt-based funding arrangement that a business can set up with ...
  5. Standing Loan

    A type of loan where payments are made of interest only. Repayment ...
  6. Hard Money Loan

    A loan of "last resort" or a short-term bridge loan. Hard money ...
Related Articles
  1. Personal Finance

    Beware of Guaranteed Payday Loan Websites

    Payday lenders generally should be approached with caution; but online payday loan websites are better avoided altogether.
  2. Personal Finance

    Why a Credit Card is Better than a Payday Loan

    Compare and contrast credit cards with payday loans, and understand why payday loans should be a last resort when you are in a pinch and needing money.
  3. Personal Finance

    Payday Loans Don't Pay

    Hold too tightly to this rescue line and you'll soon be drowning in debt.
  4. Personal Finance

    Title Loans vs. Payday Loans: Which Are Better?

    Both title loans and payday loans carry risks that outweigh the benefits.
  5. Personal Finance

    5 Reasons To Avoid Payday Loans

    Although payday loans may seem like an attractive option in a pinch, they may also leave you worse off in the long run.
  6. Personal Finance

    The Best Alternatives to Payday Loans

    If you are short on cash a week or more before your next paycheck, you may consider taking out a so-called payday loan. There are better alternatives to payday loans, including the 12 described ...
  7. Personal Finance

    Will Installment Loans Be the New Payday Loans?

    Payday lenders are leaning toward installment loans as a result of proposed federal regulations. But is this what's best for consumers?
  8. Investing

    Banks Call for Looser Payday Lending Rules

    Large banks want to be more included in the market for offering short-term, high-interest loans.
  9. Personal Finance

    The 4 Worst Ways To Borrow Money

    While there are less risky places from which to borrow, there are also predatory lenders who can make your financial situation worse than it was to begin with.
  10. Personal Finance

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  1. Is my credit score usually checked before receiving a payday loan?

    Learn more about how payday lenders operate and whether or not they check your credit score during your loan application ... Read Answer >>
  2. Do payday loans hurt my ability to get a mortgage?

    Find out whether taking out a payday loan could harm your chances of being approved for a mortgage and how lenders find out ... Read Answer >>
  3. What are some examples of a good time to take out a payday loan?

    Find out if it is ever a good time to take out a payday loan, and learn what you need to consider when looking at payday ... Read Answer >>
  4. What is the difference between an in-store and an online payday loan?

    Learn important differences between online and in-store payday loan companies. Explore different charges made by companies ... Read Answer >>
  5. In what states are high-cost payday loans illegal?

    Learn which states permit high-interest payday loans. Explore the maximum rates permitted to be charged on a state-by-state ... Read Answer >>
Trading Center