true costs

True costs of payday loans

You have looked and decided that you are best off using a payday loan you think, but do you really know how much the loan will cost you? It is extremely important for consumers to have a very firm grasp of the entire picture so that you can see how much it will really cost you. We are going to use for example a payday loan of $500. This is an amount that is around the average 2-week paycheck for many consumers and is therefore a reasonable number to use. We are going to assume that we pay off the loan over the course of one year, which for a traditional loan would be only 12 months.

true costs of payday loansUnder these circumstances, you are looking at paying 26 payments that are made every 2 weeks. This is gathered by taking the 52 weeks in a year and dividing it in half, which we then arrive at the number 26. From here, let us assume that you are paying an interest rate of $15 for each $100 that you borrowed. While all of these numbers may seem overwhelming, you are looking at a gigantic total of $1,950 just in interest alone at the end of the loan term. This means the total amount you will have paid at the end of a year is $2,450 or an incredible 390% interest rate.

Now if you decided that you were only going to pay on this loan for a period of 9 months you would be instead looking at a total interest charge of $1,350. Which while this brings the entire cost of the loan to a whopping $1,850 it is substantially better than the $2,450 that it would cost to hold the loan for an entire year. However, there is still yet room to improve and turn this even better in your favor.

Another example would be the same loan for a period of 6 months only. This still involves the original numbers of $500 for the loan and repaying $15 for each $100 that you borrowed. Now the interest charges add up to $900 with the total loan costing $1,400. As you can see the numbers are substantially lower, however it is still a lot of wasted money to continue renewing the exact same loan. If you were to only renew the loan for 3 months you would be looking at a total cost of $950 with interest alone accounting for $450 which is almost the same amount as the loan originally!

For a final look at this the same $500 payday advance carried for only a single term would only cost $575 with the interest only accounting for $75 of the costs. This is a much more preferred payment schedule and will allow you to free up your money for other bills and needs that you have. However, it is very easy to see how a consumer can become caught up in payday loans. Yet, if you take the time to really study your finances and compare all of the costs you can proceed into a cash advance with the plan and aim to repay it immediately which can allow you to get the cash you need quickly, without the struggles of paying astonishing amounts overall for the loan.…

payday loan law

Finding payday loan laws

Finding payday loan lawsThere are numerous times in your financial career that you may need to know information about specific laws and how they impact you and your finances. For example, in regards to payday advances there are numerous laws that are up for interpretation and plenty of times when they can be very confusing when you are trying to determine what your rights and responsibilities really are. This means that it is very urgent to be sure you are well aware of how things really work in terms of legal requirements.

One of the biggest concerns that people have is ensuring that they are not treated unfairly. For example, in a world that is overflowing with poorly run collection agencies it is no wonder why so many consumers are a bit leery of getting involved into another debt. However, there are plenty of people who are looking for ways to protect themselves. This means it is very important to know exactly what your responsibilities are. However, it can be very difficult to find this information unless you know exactly where to look.

One of the best places to learn about your rights in regards to a payday advance is by looking at the website for your particular state. While this will not always give you a perfectly clear picture of how things are going, it can certainly help you to determine which businesses in your area actually have your best interests at heart. By searching around on your state’s website you can gather accurately just exactly how your state regulates the payday loan industry and ensure that you are protected. However, there are other sources of this same information as well and they can include various other sources.

There are several federally sponsored websites that provide information as well. These websites will typically end in a domain name .gov and will almost always break the information down based upon individual states, which is the most accurate way to obtain the information. For consumers who are curious as to whether a payday loan lender is licensed in their state it is typically best to contact the state in which they live to ask. Another option is to contact the lender themselves and inquire whether they are licensed.

While it may seem quite trivial to know whether a payday lender is licensed it is a wise decision to know this information. After all, knowing this information it is possible to make wise and informed decisions in regards to exactly how you handle your finances, as well as the advance itself. Not knowing the information about the payday lender that you are working with could allow you to make some very costly mistakes, which can be extremely difficult to recover from.

Take the time to learn and study up on your rights. Just as you would not obtain a mortgage without finding out about your rights and responsibilities you should not obtain a payday advance without finding out your rights either. This is important information that all consumers should be very much aware of before ever going to apply for a payday loan. After all, protecting yourself from an unsavory lender involves knowing about all of your rights and knowing how to protect yourself.…