All types of loans, including payday loans, charge interest in addition to the amount which is being borrowed to the consumer. When the loan is repaid, interest is added to it in order for the borrower to make money on the transaction. Since payday loan lenders face more risk than other lenders due to most of their clientele having poor credit or no assets, the interest rates are higher to reflect this risk.
Another reason for the higher interest rates is the ease and convenience that is associated with getting a payday cash advance loan. You will always pay more for convenience, whether that is for a loan or for a quick gallon of milk at the convenience store on the way home from work.
What Are the Actual Interest Rates?
Although it varies considerably by lender, you can expect to pay around 15 percent interest, or $15 for every $100 that you borrow. Online payday lenders have published interest rates as low as $10 per $100 financed and as high as $30 per $100 borrowed. It is important to do your research and find a lender who has the most favorable interest rates and other loan terms specific to your situation. 100DAYLOANS, FAXFREECASH and AMERIADVANCE are all excellent choices for your short-term financial loan needs.
Do Lenders Have to Tell You Their Interest Rate?
Yes. All types of lenders must indicate both the percentage of interest they are charging you calculated to an Annual Percentage Rate (APR) and a dollar figure which indicates the total of the loan once it has been paid off, including the actual amount of interest and any other charges. This is accordance with the federal Truth in Lending law, a consumer protection act that was passed in 1968.
When you are budgeting for the repayment of your loan, you should figure it based on the amount of the loan, plus the actual amount of interest that was listed in your original loan documents.
What Else Do I Need to Know Before I Apply for a Payday Loan?
If you have researched your loan company and are comfortable with the terms and interest rates, the next step you should take is finding out what that specific loan company’s requirements are. Although it varies by lender, most will require that you be employed or receive another form of income of a minimum monthly amount, that you have been with your employer for a set amount of time which they determine and that you own a checking or savings account in your own name which is in good standing.
Federal law requires all lenders to require that applicants be at least 18 years old and a legal US resident.
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