Payday Loan Interest Rates

If you need cash and are considering looking into a payday loan, there are a number of things that you should consider first. One of these things is the fees and the interest rates that are going to be charged by the payday lender. In many cases, payday loan rates are much higher than any other type of loan, and may result in more debt than you had to begin with if you are not careful.

A payday loan is a type of short term loan that is given for a relatively small amount of money. Typically, a payday loan will range from $100 up to $1000, depending on the payday lender you are planning to use. The average amount of time that a payday loan is given fore is approximately two weeks. After this time period has elapsed, you will be expected to repay the loan in full and any interest and fees that have been accrued during that period.

Average Interest Rates

A payday loan, on average, will have an annual percent rate (APR) of 400 percent or more. Additionally, the finance charge that is applied for every $100 borrowed can range from $10 up to $30 for loans that are taken for a period of two weeks. The finance charges are typically accompanied by an interest rate in the range of 300 percent, up to 750 percent. If you are taking a payday loan that is shorter than the two week period, then the APR can be even more.

In most situations the payday loan will be much more costly than any other type of cash loan. An example is here:

If you take a $500 cash advance on your credit card, which will be repaid within a month, it will cost you a total finance charge of approximately $13.00 and an APR of approximately 5.7 percent. However, a payday loan for the $500 will cost you finance charges of $17.50 for every hundred that your borrow, which would equate to $105 if it is renewed once, or a total of 400 percent in annual interest.

If you are unable to pay the loan and it has to be rolled over, then you will accrue even more charges and APR charges. This can, in many cases, equate to huge charges that makes your debt situation even worse than it was to begin with.

Understanding the interest rates for payday loans will help you determine if you want to go this route to acquire the money that you need. You can learn more from Payday Loan Reviews and make an educated decision regarding taking out a payday loan.