Payday Loan Fees

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Payday Loan Fees

Payday Loan Fees

Payday loan fees vary greatly, and there are 2 reasons.

  • 1. Every state has different regulations about both the amount that may be lent and the fees associated with the loan amount.
  • 2. There are differences between lenders fees as well, and those differences are often based on their specific lending criteria.

There is not a way to specifically state what your loan fees may be. However, the best thing to do in advance of a payday loan request is to go to your state website and read the summary of your state’s laws. This is usually found in the Secretary of State section of the state website.

Things to Consider Before Accepting an Online Payday Loan

The number one consideration is whether you have tried to get a loan in other ways first. The fees associated with payday loans are high, often $15 for every $100 of your loan. If you have friends or relatives who can assist you, this will save you money. Double-check to see if you have room on a credit card as even a high-interest card will cost less than the online payday loan and can be paid back over a longer period of time.

However, if you are in an emergency situation and have no other options, an online payday loan may be a good option. It is certainly better than paying $35 per NSF check to your bank for 3-4 checks or the deposit, fees, and penalties to a utility company that can add up to hundreds of dollars.

Some Frequently Asked Questions About Payday Loan Fees

What are the costs and fees involved in a payday loan?

You are generally charged a percentage or dollar amount per $100 borrowed.

This may range from $10 to $30 for every $100 borrowed, depending on your state law and the maximum loan amount allowed in your state.

A fee of $15 per $100 is common. This is equal to an APR (annual percentage rate) of almost 400% for a two-week loan. For example, if you want to borrow $300 before your next payday, it would cost you $345 to pay it back, a fee of $15 per $100.

Do payday loans have high fees?

Yes, the fees charged for online payday loans typically are $15 for every $100 borrowed but can be as high as $30 per $100 borrowed in some states. You want to avoid extending, rolling over, or adding another loan. The fees really add up fast, so only do one loan at a time and pay it back on time before considering another loan.

How are payday loans interest rates and fees calculated?

Many state laws set a maximum amount for payday loan fees ranging between $10 to $30 for every $100 borrowed. A two-week payday loan with a $15 fee per $100 equates to an APR of almost 400%. These loans are fee-based and very short term, so APR is really not a good measure of the cost of the loan.

If you get a loan of $300 and the fee is $45, you know exactly what the loan will cost and when it is due. Is it a high fee for the amount, of course? However, almost all those who request an online payday loan have no other options and have poor credit too. Poor credit is the main reason these fees are high.

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