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.
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 your loan in 21 or less
days and not pay such a high interest charge.
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 interest was
$18 for a $100 loan, the fee would be 18 or 18%.
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.
While other forms of credit have better interest rates, you can get approved quicker with
payday loans. Most lenders process your application in less than five minutes, especially
with no faxing advance cash companies.
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.
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 your loan in 21 or less
days and not pay such a high interest charge.
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 interest was
$18 for a $100 loan, the fee would be 18 or 18%.
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.
While other forms of credit have better interest rates, you can get approved quicker with
payday loans. Most lenders process your application in less than five minutes, especially
with no faxing advance cash companies.
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