FinanceCreditLoans
ANSWERS: 10
  • CFA's (Consumer Federation of America) survey of 100 Internet payday loan sites showed that loans from $200 to $2,500 were available, with $500 the most frequently offered. Finance charges ranged from $10 per $100 up to $30 per $100 borrowed. The most frequent rate was $25 per $100, or 650% annual interest rate (APR) if the loan is repaid in two weeks. Typically loans are due on the borrower's next payday which can be a shorter term. Only 38 sites disclosed the annual interest rates for loans prior to customers completing the application process, while 57 sites quoted the finance charge. The most frequently posted APR was 652%, followed by 780%.
  • A payday or cash advance loan is easy to secure but the cost can be prohibitive. Companies that offer cash advance loans are regulated by State and Federal laws but that does not mean that the fees are what most consumers would call good. For example: A typical $100 payday loan with a $12 fee has an APR of 313%.
  • There doesn't seem to be a "typical" rate. My very unscientific poll saw rates anywhere from 17% (capped by law) to 700% (obviously untouched as yet by any legislation).
  • Interest is just one part of the cost of doing business with a payday loan company. They cannot charge more interest than is permitted by law, which amount will vary with your legal jurisdiction. In Canada, for example, the maximum interest rate allowed under law is 60%. Most payday loan companies advertise interest rates well under this limit. However, these companies levy heavy fees over and above simple interest and their interest charges compound in a very short period of time, both of which combine to greatly increase the effective interest paid on the loan. A class-action lawsuit was launched in Canada in 2005 against one company, as a test case for the industry in general. The suit claims that the effective interest rate (interest plus fees) charged on a loan was equal to 15,000% a year, exceeding the 60% allowed by law. "The lead plaintiff in the suit ... said he could never get a loan from his bank when he was short on cash, so he borrowed $500 from a payday loan store. He paid it back two weeks later – along with $11 in interest and $95 in brokerage fees. ... the total that [the plaintiff] paid would add up to more than 15,000 per cent per annum. Elsewhere in Canada, there are about a dozen lawsuits filed against other payday loan operations." - From the CBC (http://www.cbc.ca/story/canada/national/2005/04/26/payday-loan-050426.html) Many, myself included, believe that payday loan companies are little more than parasites, because of the profits they cull at exorbitant rates from those in society who are among the most vulnerable economically.
  • I would be careful, payday loan rates can reach as high as 1000% if you don't pay them back on time. Fair assumption... Around 300 - 400%.
  • Payday loans are very high on interests. General APR s 1355. That is pay 25 pounds on every 100 pounds. Nonetheless the interest rates majorly depends on your terms and conditions. If you have a god credit history, interest rates would be low, vice-versa.
  • Typical APRs for payday loans range from 391% to 443% with finance charges of $15 to $17 per $100. Usually, however, the loan rolls over and the interest rate is much higher. If the borrower cannot repay the loan at the following payday, they must pay the finance charge again.
  • The short-term payday loans can often have annual percentage rates that top 700%.At the annual percentage rates that top 700%, the daily percentage rate is 1.92%. What this means for every $100 that is borrow on a payday loan you will be paying back $1.92 in interest.It sounds interesting right. Now if you borrow $500 for a 7-day period. now the $1.92 per day becomes $9.60 per day. $9.60 times the 7 days is $67.20 in interest to borrow $500. Now if you only are paid every 2 weeks and need that same $500 for 14 days that $1.92 a day is still $9.60 but times that $9.60 times the 14 days and you are paying back a whooping $134.40. It will cost you $134.40 to borrow your own money for a 2 week period.
  • Astronomical!

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