RATES & FEES
How Much Are Payday Loan Fees?
Payday loan companies are sometimes referred to as fast cash and quick loan providers, so understand that these are all similar companies. The fees that these companies charge differs depending on the area that you live and the company that you go through. Some payday loan companies charge more than others and some charge a lot less. The main fee that you have when you take out a loan through a payday loan provider is your interest costs. Interest is the money that you are expected to pay back on top of the loan.
Interest rates are generally at an 150% API or higher
It’s important to set realistic expectations for your payday loan. Payday loan companies all have high interest rates, primarily because they are short-term loans. You are expected to pay back the loan within a quick period of time, usually just a couple of weeks. With a repayment term this short, the API is considerably higher than what you would receive through a bank loan. 150% API’s are considered low in the payday loan business, so you should expect an API of this amount or even higher. Remember, an API is an annual rate, so 150% fees are not what you are actually paying when it only takes you a week or two to pay back the loan.
Late fees can be substantial
Late fees through payday loan companies can be quite substantial. Often times, late fees are how these companies make the majority of their money. When you sign up for a payday loan, be certain that you can pay it back within the specified time frame. You wouldn’t want to be late on your payment and have to pay more money because of late fees. Every company is different and you will have to review their terms and conditions to know the actual cost of late fees.
Payday loan buyers often take out multiple loans
Something worth mentioning here is that some payday loan companies will suggest taking out multiple loans so that paying back your initial loan is easier on you. This is a recommendation that is advised against by most financial experts. Regardless of how much money you are racking up in fees, it’s never a good idea to take out another loan. This would put you in further debt and while it could end the fees your initial loan has been accruing, you might end up in the same position with your next loan.