Payday loans are undoubtedly the most popular and widely used short-term debts in America. Especially, the low and middle-income groups depend on these emergency cash loans to address the shortage of funds between paycheck days. Since one can avail money as little as $50, and a maximum of up to $1,000, every kind of unexpected expenditure that falls under the amounts gets taken care of. On top of that, easy application, acceptance of poor and bad credit scores, speedy approval and direct deposit make these cash advances very convenient compared to other personal loans.
For these conveniences, lenders charge 400% APR at an average. APR (annual percentage rate) is interest + fees -calculated annually. All the loans and financial products are calculated the same way. If you take out a payday loan worth $100, the annual cost is around $400. The cost per day would be- 400/365= $1.1. If you pay back after 2 weeks, it would cost you 1.1 × 14= $15.4. This might vary a little depending on the lender. Some lenders give you a term of 30 days as well. Payday loans are meant to be repaid on salary day, and borrowed only when necessary- and not for repeated use.
Why Payday Loans Are So Expensive?
Yes, compared to other personal loans, payday advances have a higher APR rate. We also explained how it is calculated and what kind of amount you will be charged depending on the principal amount. We also told you how these short-term loans provide you with great convenience and that makes the cost a little higher. However, that is not all. Payday lenders are companies like any other, and in order to run a business, pay employees’ salary, make a little profit, they need to have an income source. Many lenders also do not charge anything if you return the loan amount within 3 days of approval. Besides, although the APR looks huge, the actual cost in a very short term is affordable for many borrowers. That is the reason why people prefer these debts.
Whatever the normal APR, if you are a regular customer of EZPaydayCash, you get additional benefits. Usually, you can qualify for a higher amount, and the interest rate will be lowered. Then take out a payday loan, pay off on due, and keep repeating! We give you an instant approval- even with a bad credit. Apply here!