Payday loans are widely available financial products, which people eagerly reach for. Most often, the decision on such a loan appears when we need money for already. Payday loans can appear on our account even the same day we submit the application. But what are the costs of payday loans? What is their interest rate?
Payday Loans – What Do You Need To Know?
Payday loans are micro loans granted by the so-called parabank. Their amounts are usually not high, they can amount up to several thousand dollar. One-off repayment method is characteristic of these loans. Importantly, liabilities must be repaid in a short time, usually 30 days, although it happens that some loan companies extend this period to 45 or 60 days. In some parabanks, you can take payday loans in installments, in which case they are paid back for a specified period, just like a bank loan.
What are the costs of payday loans?
Payday loans have a high risk of being easily available. This, unfortunately, is associated with the high cost of such loans. When using payday comparators, it is worth looking for information not only about interest rates on loans, but about total costs. It is therefore necessary to check how high the Real Annual Interest Rate is, ie APRC. The payday fee includes registration fees, commissions, and some congratulations. Additional fees may arise if the loan is not repaid on time. The company will charge for sending reminders, there may also be debt collection fees and court fees.
However, you can count on zero interest rates on payday loans. We are talking about promotions that are offered by some parabanks. They are intended only for new customers. The first payday loan can actually be free, without any costs, if it is repaid on time.
Who can take payday pay?
The payday loan can be taken by a person over 18 years old . Some parabanks, however, introduce requirements exceeding the borrower’s age and target their products to people who are at least 21 years old. Older applicants are more reliable for parabanks, they can have a source of income, so they are more likely to pay back the loan on time. Loan companies don’t have many requirements. It is necessary to present an identity card and it actually ends there. For larger amounts, however, you may be required to include a earnings certificate. Even people with a negative credit history can get small amounts. There is no shortage of payday loans for those in debt, but one should take into account the high costs of such loans.
What can you spend your payday pay for?
Payday loans are not intentional liabilities, ie they do not have to be used for a specific purpose, eg mortgage or car. Parabanks do not require an allocation of funds in the application. This means that you can spend money on virtually anything. The only limit is the low amounts offered by parabanks.