The Payday Cash Loan Interest Rates Versus Flat Fees

The Payday Cash Loan Interest Rates Versus Flat Fees



The Payday Cash Loan – Interest Rates Versus Flat Fees
More and more cash advance lenders are charging flat fees instead of​ interest rates .​
This has been in​ response to​ increased state regulation .​
By charging a​ flat fee,​ lenders can avoid some of​ the​ caps put in​ place by some states.
Comparing Interest Rates
Interest rates for payday loans are typically higher than other forms of​ credit since they are small amounts and have a​ higher risk level .​
Most online lenders will still use interest rates to​ determine your loan charge .​
You may also have to​ pay a​ service fee,​ although most cash advance companies will waive this for first time borrowers.
The other interest rate to​ look at​ is​ the​ APR (annual percentage rate) .​
All lenders,​ whether they charge by an​ interest rate or​ flat fee must disclose this through their website and loan agreement .​
The point of​ an​ APR is​ to​ give you​ a​ way to​ make comparisons .​
However,​ if​ you​ are like the​ majority of​ borrowers,​ you​ will pay back you​ loan in​ 21 or​ less days and not pay such a​ high interest charge.
Looking At Fees
Because some states have placed more limits on​ cash advance companies,​ lenders are charging fees rather than interest rates .​
By doing this,​ they avoid usury laws.
You can still use the​ APR to​ make comparisons with these types of​ companies .​
You can also divide the​ fee into the​ loan amount to​ get a​ percent .​
For instance if​ the​ was $18 for a​ $100 loan,​ the​ fee would be 18 or​ 18%.
What you​ Should Know
When you​ are comparing cash advance companies,​ you​ want to​ be comparing like numbers .​
That is​ why APRs can be so helpful .​
You also want to​ look at​ the​ payment plans and make sure they are equal .​
Besides loan costs,​ also look at​ other fees for extending the​ loan or​ for late payments .​
Also,​ be sure you​ can change the​ payment plan if​ you​ can’t make immediate payment on​ your payday.
If you​ think you​ can’t repay your loan by payday,​ you​ may want to​ take a​ look at​ other forms of​ credit .​
a​ personal loan or​ credit card may offer better long term rates.




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