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Top Ways To Get A Bad Credit Loan
If you have a bad credit rating, then you may think that it is impossible for you to get a bad credit loan. This, however, is not true because there a number of bad credit loan lenders who are willing to provide bad credit loans. With bad credit,...
Poor Credit Debt Consolidation Loans
Poor credit debt consolidation loans are an excellent option to
consider if you are an individual who wouldn't qualify for a
traditional loan, but are in need of money to pay off bills,
consolidate debt into one lower payment, and improve your...
Payday Loan Advantages
In the past few years, advertisements for payday loans are popping up everywhere - on store signs, in newspapers, on billboards, and especially on the Internet. Some payday loan companies advertise by direct mail, so you may even see ads arriving in...
How To Start Your Own Business
While it is tempting to just leap into a new business because of it’s exciting possibilities, a few key planning points will vastly increase your chances of success. These steps aren’t difficult, but they’re easy to skip. Many businesses ultimately...
Bankruptcy: What's the difference between Chapter 7 and Chapter 13?
When consumers contemplate the option of bankruptcy generally, the remedy they are specifically referring to is chapter 7 bankruptcy. The effect of the filing is to discharge someone saddled with debt from having to pay debts no longer secured with...
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Why a payday loan has higher interest than a bank personal loan
Ever wondered why a payday loan interest rate is higher than a bank's personal loan The truth is, payday loans don't have an interest rate... instead a fee is charged.
Why is a payday loan interest rate higher than a bank personal loan?
A payday loan is a short term, high risk loan, and is offered to anyone with no credit checks. Generally, payday lenders do not charge an interest rate, but instead charge a "flat fee" based upon the loan amount and the date the loan is repaid. Because of the lender's high risk and the short term of the loan, by comparing the fee to that a typical bank personal loan, the interest rate calculation is higher.
Typically, payday loans are short term advances which are due on the following payday, unless the payday is four or less days away from the loan date. In such instances, loan repayment becomes due on the subsequent payday, with a maximum loan term of 16 days.
A payday loan charges a flat fee, which is fixed per loan amount. This causes the Annual Percentage Rate (APR) to vary depending on the number of days between the date the payday loan was activated and the date it was repaid. There is no refund of fees for early repayment.
Payday loans are short term advances which recipients should repay quickly. Although payday lenders charge a flat fee, they must provide calculations as to their interest rate. Due to various Truth-in-Lending laws, disclosures must be expressed as an Annual Percentage Rate (APR), or the cost of the credit advanced expressed as an annual rate. This requirement provides uniformity among various lender resources, so borrowers can compare rates.
Most payday loan lenders require an active checking account, but some will offer a bank savings account payday loan. And there are lenders who offer a no fax payday loan.
ABOUT THE AUTHOR
Submitted by Toni Phelps of www.CreditFederal.com
Read more of her loan articles.
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