Payday loans rates—here are some details that will help you understand more about payday loans rates and interest rates.
Payday loans have come as a savior for many who have bills to pay before the next payday. With payday loans, you get a cash advance that will enable you clear your outstanding bills or repair your bad credit. These loans are for a short period of time, ranging from one week to a month. They are better than calling your relatives and telling them that you need money! But before applying for these loans, you should take time to understand terms and conditions of each lender; otherwise you may find yourself in a fix. You should understand their payday loans rates and other important details like how to repay the loans.
The range of rates
Payday loans rates vary from lender to lender and from state to state though there is a range that is acceptable in the industry. Many lenders will charge a fee of around $15 to 18 for borrowing $100. But as I said, the rates are not fixed and it depends on who is lending you. Some will charge $60 for $200 borrowed. And going by the percentages, the rates will range from 15 to 18% for the period of two weeks or depending on how long you agree with the payday loan lender.
The interest rates
But there are also interest rates also that you should take time to understand. The loan fee charged is not inclusive of interest rates. Interest rates are charged on per-annum basis. Interest rate are not very crippling anyway. However, if you are forced to do a ‘rollover’, which means extending your payday loan, then the interest rates may keep on piling and can even supersede the initial amount borrowed. If for example you borrow $200 to be paid in two weeks with a fee of $50, and after two weeks you find that you can’t pay off the money, you will extend that loan for another two weeks but this means another fee of $50 will be charged. At the end of the four weeks, you will be paying $100 in fees plus the original $200. Some clients may rollover their payday load many times until they find that six months later, they have not been able to pay it off.
Dealing with interest
Interest may run to the tune of 400% to 1800% per year depending on the lender, the amount involved and the state laws governing these types of loans. But this should not be alarming if you plan your finances wisely. The aim of going for payday loans in to help you deal with urgent bills that can’t wait the next payday or to repair your bad credit if you have poor credit, so that you can go back to your normal life of using your credit card. It is therefore important to pay on time to avoid too much burden accruing from fees and interest rates. Make sure you know how much you can spare from your next paycheck to pay off the payday loan and the fees. By so doing, you can easily borrow and pay as agreed and not get entangled in a new financial crisis you will have to resolve.