How to Choose the Best Payday Loan Company: Cost of Loan
This is the second part in the series on Choosing the Best Payday Loan Company. If you’re the type who likes to start in the beginning, then you can catch part 1 by clicking here now!
Otherwise it’s fine if you start right here, because all of the elements in this series are crucially important. With that, let’s move on to…
Element #2 – Cost of the Loan
Here’s the thing… I know that right now you’re nervous and stressed about your bills, and so you’re really not thinking about how much a loan is going to cost you down the road.
You want to be able to get this situation taken care of as soon as possible, get the money in your hands (or your bank account), and then worry about what happens with the loan.
But unfortunately, I’m here to tell you that this isn’t very smart and that you’ll regret that later.
So let’s just quickly go over a few things about loan cost, so that you’ll at least know a little bit of what to look for before applying for a loan that might cost you more than you really want to pay.
How These Loans Work…
It’s important that you understand how these loans actually work.
Basically these are short term loans. They call them Payday Loans because typically the term is around 14 to 30 days (which essentially supposes that most people get paid every two weeks or so.)
You’ll almost always see that the loan costs and fees are usually between $15 and $30 dollars per every hundred borrowed. So let’s say you get alone at the lower fee of $15 per $100 borrowed, and you borrow $500. You’ll then owe $500 back plus $75 at the term of the loan we’ll use 14 days in this scenario.
That’s a very substantial amount already, and typically with these loans, the annual rate is somewhere around 500% average, some will be less, some will be more.
Now let’s just take the part where it gets costly, and why YOU should be sure that you can pay your loan on your next paycheck.
If you cannot pay your loan back, and you need to extend the loan to another term (another 14 days) then it’s going to cost you another $75 fee to do that, even if you’ve paid off some of the loan in most cases. So now, in the next 14 days you’ve got to pay $150 plus the original $500 borrowed.
Every time you extend your loan, you’re hit with another $75 fee.
So you’ve really got to be careful when choosing your loan that you’re getting the best pricing possible, as well as the fact that you’ll be able to repay the loan, because as you can see it can lead into some pretty big fees.
Again though… you’re in trouble now, and you have something pressing then that might be something that you’ll be able to live with. One of the better companies as far as loan terms go is Cash Net USA, because they offer different types of loans that might better suit your needs.
Alright so now that you know the truth about the costs of the loans, you may want to move right into the next part of this series on Choosing the Best Payday Loan… and you can do that by clicking here now!