How Much Will a Payday Loan Cost?

How Much Will a Payday Loan Cost?

There can be times that you may be suddenly short on cash or in a financial crisis. In these situations is where a payday cash loan can be helpful. A payday loan is a kind of loan that people avail when they have a short term financial need. There is now an online fast payday loan that can give you an instant approval and have your money deposited to your bank electronically within the day. So there’s no need for you go out of your home because you can do all these online.

Cash loans should be in compliance with the federal lending regulations. Payday cash loans are subject to state laws also. Most of the states in the country today allow payday lending to be practiced but there are some rules and restrictions that are enforced in some of these states.

There are certain variables that determine how much the total cost of a payday loan is. The cost of a payday cash advance loan can be affected by the place where you reside. There are certain states that set limits on the interest rates of loans and there are also others that don’t have any regulation on it. Next is the kind of lender that you deal with. Some “low cost” lenders charge only a minimal interest rate that is lower than other lenders, some online lending companies may charge even higher.

The amount of money you loaned is another factor. Most of the fees charged to you are computed based on the amount you borrowed. How long you plan to pay the loan is another factor to consider. The longer it takes for you to pay back the loan the more expensive it becomes.

Will Payday Loan Cost

Considering all the factors given, you may determine that having a payday loan cash advance of $100 for a short time would cost you around $15 to $30. Always remember that most lending companies have a rule that your fees are due again every time the loan is due and the balanced is rolled over again.

For instance, you borrowed $400 to be paid in 2 weeks with a fee of $80, which is $20 for every $100. It will cost you $480 when you pay the loan it when it is due. But if for some reasons it took you 12 weeks to repay the amount, the fees can accumulate for 6 loan periods with $80 each loan period, for a total of $480 worth of fees. Add this amount to your original loan of $400 and you would end up paying a total of $880. That is double the amount you originally loaned. But if you live in a state where there is a regulation on cash advance payday loans, they usually have a limit on small loans, called as usury caps. This limit is to protect the borrowers by limiting the amount the lenders can charge for the approved cash advance loans.