Did you look for a best payday lender when applying for a fast cash advance? Do you even know what to look for? Many people will apply with the first company they find and then continue to use the same company for repeat loans. The average short-term loan user will take out 5-8 loans throughout the year. If the direct lender does not offer the competitive rates, the interest fees will make paying off the loan that much more costly.
Payday lender rates are not all the same.
Unlike banks and credit unions that vary their interest rates depending on a person’s credit score, the payday loan lender has one set fee for all customers. There is no credit bureau check, so even a credit challenged applicant has a chance to receive a short-term loan. The high interest rate is often welcomed when emergency money takes priority. Applicants in a hurry don’t often think about finding a better price for the loan, they are just happy that they found one.
The average interest for short-term loans is 35% for every $100 borrowed. If you take out a $300 loan, you will be paying $105 in interest fees. In just a few short weeks the borrower must come up with the money to repay the loan plus fees. If not, the loan is extended and more fees will be due in just another few weeks. If this same applicant shopped for a lender with better fees, there won’t be as much to pay back. If you could fine a lender with an interest rate of 25%, the full payoff for the same loan would only be $375. The savings is significant especially if the loan is rolled over for another term. If you can find a lender that charges less than 25%, you are saving even more! For those borrowers who repeat loans throughout the year, the money saved by finding a better payday loan interest rate is a significant amount. It could possible even counteract against their need for a fast cash advance and keep them from taking out so many during the year. Supporting your own emergency costs is the most cost efficient way to handle your expenses.
If the interest is so costly, how do these loans help? If the applicant is facing bank charges for NSF and/or overdraft fees or looking at potential late fees and then possible consequences from them, a short-term loan paid off quickly does help. Besides potentially saving money by using an emergency loan, these borrowers will also help to save potential negative reports onto their credit history. If you can keep your creditor from raising your interest rate, you would be saving lots of money over the long-run. Some creditors have penalty rates which can run higher than you payday direct lender’s rate. High interest on a revolving account with a hefty balance is damaging to any budget.
It makes good financial sense to shop around for the best payday loan lender rates. Instead of applying for the first lender you find, make a list of 5 different lenders and call them. The more questions you ask about their terms and conditions the better informed you will be when it is time to apply for the loan. You need extra cash fast and a payday loan will help money matters so take a few moments to find the best direct payday lender to work with.
