Not all lenders of payday loans are always very clear about the costs of Payday Loans and they will always find new ways to increase their profit and your loss.
In the best situations you will be seeing a clear overview of what a payday loan will cost to you upfront. In the worst situation there may be some ‘hidden’ costs that are only known when you read the loancontract at full lenght.
When choosing a Payday Loan provider it is best to compare up to three lenders. Even in the case you may want to have the money right away it is best to wait a little bit and do a little bit of research.
Most payday loan providers will deposit the money on your bank account the same day as you apply for the loan. They have scheduled several moments a day when they deposit the loans, and some lenders even have a fully automated process.
Most payday lenders offer this kind of information on their website but not all are as accurate as they could be.
Comparing Pay Day Lenders
When comparing the different loan providers, it may be very smart to pay attention to exactly what amount you will have to pay back at what due date. Are you sure you are able to pay back this amount by that date?
It is a good advice to check the costs of up to three lenders before deciding which pay day loan provider you would like to apply with for your short term loan.
The cost of most payday loans tend to go up from 20% to 50% of the total sum you borrow. If you lend 200 pounds, this typically means you will have to pay back up to 240 up to 300 pounds within the agreed period (typically 2 to 5 weeks).
Think very well to know sure if this is really worth your money and be sure to know what are the exact cost and the total amount you need to repay.
Interest Rates Payday Loans
Many payday loan providers will lure you into a payday loan by advertising with low interest rates. Some payday lenders even advertise that their loans come with no interest at all. This is a smart marketing trick by which you can see that payday lenders are not always honest about their costs.
Payday loans should never be used to pay off existing debt (source).
Instead of interest, these lenders come with fees that you have to pay for the loan. They make it appear the loans come without interest costs but cover these up with other sort of costs, such as lending-fees or administration costs.
Costs of Overdue repayment
There may also be extra costs in case you are late with repaying your loan. In this case it is always advisable to inform the lender right away. There may be special rules in place so you have some extra time to pay back the loan without extra fees and costs.
In most cases though lenders tend to come up with quite some extra costs in case you’re late with repaying the loan. But you also have your rights and lenders cannot keep on charging you more and more for every day you’re late with repaying the loan. See for more information Repaying your Payday Loan.