Here’s Why Your Payday Loan Is So Expensive
Payday loans give individuals the opportunity to get their hands on cold hard cash. Most customers need cash for different financial emergencies. Some turn to high interest financing when traditional lenders aren’t quite as comfortable lending money. This has become more of an option for common citizens over the past decade as we’re dealing with a lending crunch. That doesn’t mean you should jump right into these kinds of deals without doing research. Look into different options that are available from reputable online lending companies. You see, the interest rates on direct payday lenders can be sky high. Sometimes they are so significant that it makes next to no sense to go forward. Get quotes with these kinds of payday loans. You usually won’t come across these “loan shark” offers as much as you used to. Even still, you need to be sure to calculate the interest to pay. Some loans have high rates and you don’t want to default BEFORE you take advantage of them. Here are some important things to think about.
Know the interest charged by direct payday lenders before you commit!
As mentioned above, you need to know EXACTLY how much interest you’re going to pay. Almost every loan offer will have an annual percentage rate that’s tied to your state’s interest rate limits. Some direct lenders will make you sign on the dotted line with bad credit. Most of the time, legitimate operations are going to calculate your interest payment. It’s a way for you to provide details before you move forward. But you may have to do a little bit of calculating all on your own. This is mission critical and cannot be skipped. Don’t look at the “APR rate” of a short term loan to calculate your interest payments. Be sure that you don’t get hung up on the “APR rate” of the interest that they advertise. Your number is almost always “fudged” at least a little bit. The plan is to make it look a lot more reasonable. Car title loan companies have higher interest rates than you would ever pay with a more traditional lender. At the same time, they are taking on a lot more risk. So it’s easy to understand why their interest rates are so much higher.
Another thing we recommend is that you find out about any late fees charged by the direct lenders your looking to work with. Charges include: transaction fees, contract fees or extra hidden fees. You may not be aware of charges when it comes to your direct payday loan. You want to make sure that you aren’t hooked on the high interest rates. You are going to have to pay when you leverage direct payday lender fees. There are examples all the time of people who have taken out direct lender installment loans, only to find out there are unknown rules or restrictions in their loan contract. You are also going to want to calculate any late fees. Transaction fees or any extra hidden fees can add to the total costs. You might not have been made aware of finance charges right off the bat. So you know EXACTLY how much you’re going to have to pay when you are loan is due.
To surmise, we always recommend to read through the entire lending contract. DO this research before you move forward. If you feel more comfortable, you may want to have a friend or relative read through your contract to make sure you haven’t missed anything. Another thing to try is to call up other direct payday lenders to see if they have flexibility with their rates. This is a good way to compare rates and get a better idea of what you’re going to be dealing with when it comes to the application process. A payday loan from a direct lender can be a viable options to get cash fast. Consider this source of next day funding if you have bad credit. But make sure you know what you’re getting into with a vehicle equity advance!