Are Payday Loans Good or Bad?
Payday loans are short-term cash advances borrowed especially between paydays to address cash shortage or to meet unavoidable expenses; for example, fixing a car or visiting a doctor. Store-based lenders, as well as the online ones, offer such financing without running through your credit within a day of application. You can avail anything between $50- $1000 without any obligation on spending, but need to payback on the due- which is the coming salary day. Therefore, payroll loans are the best option when it comes to immediate cash scoring.
Since the payday lenders do not perform a traditional credit check and lend money to people having bad credit scores with same day processing, they provide greater convenience compared to conventional lenders. This is the reason the interest rates of these cash loans are a bit higher than other kinds of funding. To some people, this might be a bad option, but many people prefer such debts.
Financing companies such as EZPaydayCash always compete to give lower rates to borrowers. Apart from that, in different American states, the interest rates can vary. However, it is still possible to get an average value of how much they cost.
What Is the Average Interest Rate on a Payday Loan?
Typical payday loans are charged with an APR (Annual Percentage Rate) rate, and not interest rate alone. APR= interest + fees. Therefore, in order to find out the cost of an average payday loan, we have to understand how APR works. APR is an annual (365 days) estimate for a payday loan, but is calculated for the term the borrower takes out the loan. For example, if the term is 14days, then the final cost is, APR/365 × 14. Normally the APR is 400% for payday loans. Let’s say you borrowed $100. So 400% of $100= $400. Now, for 365days the APR is $400. The cost per day= $400/365= $1.1 (approx.) For 14day term the cost is $1.1×14= $15.4. So the average cost (interest fees) the debtor pays for a $100 payday loan for a 14day term is $15.4. Remember that the APR rate could be different from another lender. Therefore, it is important to borrow money from the right lender. EZPaydayCash understands that cash advances are mostly borrowed by low and medium income group people, so we try to offer you competitive APR rates. Apply to take out a payday loan from us now and find the rates among the best avail