How to Compare Payday Loans

Payday loans can be the ideal way to access cash in a hurry when you’re caught short. With most lenders, your payday loan is designed to be a short-term loan only.

In most cases you should receive your money on the same day, so you’re able to pay that unexpected bill or cover those surprise expenses. Then you simply repay the amount you borrowed when you receive your next pay check.

However, if you’re not careful to do a bit of homework before you apply for your payday loan you could end up paying more than you need to. Before you submit your application, take a bit of time to compare the offers available from a few different payday loan lenders. You’ll soon realize that the fees and charges associated with your loan can vary enormously.

Here are some things to look for in any payday loan:

Real Interest Rate

When you read through the website for most payday loan lenders, you’ll notice the interest rate is displayed as a monthly rate. Many people feel that paying 20% interest on money they borrowed isn’t so much higher than the rates you pay on credit card debt.

What you may not realize is that 20% per month adds up to a whopping 240% per year. Another factor to take into consideration is that some lenders will display a rate of 20% over a 10 day lending term, which annualizes out to  730% per year interest rate.

Always double check whether the interest rate shown on a payday loan website is charged monthly or over a specified lending period. Then take the time to annualize the rate to ensure you’re not paying more than you should.

Lending Fees

The interest charged on payday is exorbitant enough. However, many lenders will also charge lending fees over and about the interest costs. Some will calculate the fees as a percentage of the amount you borrow. Others will add a flat-fee charge regardless of the loan size.

Take a bit of time to see if you can find where the lending fees and charges are noted on the website. Then compare the options available to make sure you know how much needs to be repaid.

Payday Loan Calculators

Most payday loan lenders feature handy calculators on their websites. The majority of these are created as sliding scale calculators, allowing you to slide the graphic across to represent how much you want to borrow.

As you slide the graphic across the scale, the amount you’re expected to repay is calculated instantly for you. For example, if you borrow $500 you might be expected to pay back $620.

While a sliding scale calculator is really easy to use, they can be misleading. Try to find a calculator that shows you the breakdown of interest costs and lending fees so you know precisely what you’re paying for.

Ready to Apply

When you’ve compared a few options, you’ll soon realize that some payday loans are a little cheaper than others. You may also find that some lenders are more lenient than others, while still others give you access to your cash in a much faster time-frame.

If you’ve taken the time to compare the options available you should be in a good position to choose the right loan to suit your needs. Always remember to only borrow as much as you can realistically afford to repay and you should find that a payday loan can be handy for those occasions when you need cash fast.

Advertisement

Advertisement


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


2 Comments

  • Alan Dominguez says:

    all these websites tell me when they csll, that because my credit is fair i need to put down the first months installment?

  • Dale Jelinek says:

    We unfortunate have a few medical bills, but a unexpected plumbing bill! Devastating to our home expenses was a broken pipe line with water damage and had to call a plumber to fix and repair. Now we need to pay the bills after this water problem. We needed a loan and we needed it fast, reading everyone’s comments was helpful to know we are not the only ones getting into a bad situation.

    Thank you,

    Dale Jelinek

Payday Consumer Notice:

APR

The APR of a payday loan varies in each state and depends on the lender, the advance amount, fees and terms of the transaction. The APR in our network of lenders can range from 265.36% to more than 700% on 14 day terms.

Implications of non-payment

Implications of non-payment vary from lender to lender and by state regulations. If you are unable to repay your loan you may have one or all of the consequences listed below depending upon the terms of your lender. Fees may include but are not limited to: insufficient fund fees, administrative fees, late fees, non-payment fees, court costs and legal fees.

Collection Practices, Credit Score Impact

Payday Loans are due and payable in full in one payment at the end of the loan term, unless the Lender offers renewals or other repayment options. Make sure to review the terms and conditions of your lender if you fail to pay on time.

  • Late payments of loans may result in additional fees or collection activities, or both. Each Lender has their own terms and conditions, please review their policies for further information.
  • Non-payment of credit could result in collection activities and your account could be turned over to a collection agency. Each Lender has their own terms and conditions, please review their policies for further information.
  • Failure to pay your loan on time could result in your lender reporting the delinquency to a credit reporting agency. This could result in the lowering of your credit score which could make borrowing more expensive in the future.

Renewal Policy

Renewal policies vary not only by lender but also by state regulations. Every Lender has their own renewal policy, which may differ from Lender to Lender. Renewal fees vary by lender. Please review your state regulations and you lender's renewal policy, terms and conditions.