Rates And Fees:
Before deciding to take out a cash loan...
it is important to understand that there is always an added cost on top of the principal amount that you must pay. This is different depending on whether you take out a payday loan or installment loan.
Under the Truth in Lending Act lenders must disclose all loan fees and interest rates that borrowers will (and could) incur, at the time of approval. This means you will be clearly informed of the cost of the loan prior to signing the agreement. It is your responsibility to read this and understand it.
Please take the time to read the sections below that apply to you.
Payday Loan Finance Charge
If you take out a payday loan with one of our lenders you will be expected to pay what is known as a Finance Charge on top of the principal amount (the amount borrowed). If you make the repayment on the agreed upon date this is the only charge you will need to pay.
The finance charge is a set amount that will be clearly displayed to you in the offer and can be referred to in the agreement. It will be taken automatically from your bank account along with the full principal on the agreed upon date.
The cost of the finance charge is dependent on a number of factors including the amount you have borrowed (the more you borrow the more you're charged), the information you provide the lender (income status etc), and the state from which you are applying, as different states have different regulations regarding how much can be charged. For example in Utah there is no limit on what can be charged, whereas in Florida finance charges may not exceed 10% of the total loan amount. In practise however it will usually fall between $12 to $30 per $100 borrowed (based on a two week loan term).
So if you borrowed $200 you might expect to pay between $24 and $60. So the amount taken on the repayment date will be between $224 and $260, which includes the principal and the charge.
Payday Loan Interest and Late Fees
The only time you are obligated to pay more than the finance charge on a payday loan is if you miss the repayment date. Again policies surrounding this can vary from state to state. For example in Colorado lenders are allowed to charge a $30 maintenance fee for each month that the loan is unpaid. In other states a more typical interest APR is charged for the time that the debt remains outstanding. This can range from 260.71% to 1825%. You may also be charged a single fee if the lender is unable to recover the repayment on the agreed upon date.
APR and late fees as they pertain to your individual situation will be fully disclosed to you.
Installment Loan Interest
Because an installment loan is repaid in installments rather than one lump sum, you have to pay interest on the loan. This is set at an Annual Percentage Rate (APR) and is paid on each installment along with a portion of the principal. When you pay the final installment both the principal and interest is fully paid and you obligation is complete.
When you accept the offer the lender will issue you a payment schedule that will outline how much you have to pay at each installment, which includes both the principal portion and the interest portion. You will also be informed of the total cost of all installments. Installments will usually be equal amounts.
Early Repayment of Installment Loans
Some lenders allow you to repay your installment loan in full at any time. While there may be a charge to do this, interest is only applied while the debt is outstanding. So in other words you will not have to pay the full amount of interest that would accrue if you stuck to the full loan term.
Failing To Make Payment
If you believe you will be unable to make repayment on either a payday loan or installment loan you should contact the lender right away. Depending on local state law and your individual circumstances they may be able to offer a loan extension (giving you more time to make repayments) or a renewal (issuing a new loan that covers the previous loan and therefore gives you more time to make repayments). Under both scenarios interest and finance charges apply.
If you miss a repayment and do enter in to a dialogue you may be subject to additional fees and interest (see above for payday loans) depending on state regulations.
The late payment policy as it pertains to your individual situation will be outlined in the agreement and should be reviewed before you digitally sign the contract.
Lenders reserve the right to carry out collection proceedings against non-payers which may involve emails, letters and phone calls. They may also contact the credit bureaus which will leave a black mark on your credit rating and make it more difficult to obtain credit in the future.