Payday loans are short-term loans that are typically due on the borrower’s next payday. These loans are popular as they provide a very quick and easy way to get cash in emergencies. However, some thought should be put into selecting the best one as some payday loans come with high fees and interest rates that can make them very expensive to pay back.
According to a report by the Consumer Financial Protection Bureau, the average payday loan borrower takes out 10 loans per year, spending an average of 199 days per year in debt. Additionally, the report found that the median annual percentage rate (APR) for payday loans is almost 400%. If you are considering taking out a payday loan online, it is important to understand how much it will cost you and what the risks are, which this article aims to detail.
What Are Payday Loans?
Payday loans are a type of short-term loan that is typically due on the borrower’s next payday. These loans are designed to tide borrowers over in the face of unexpected financial emergencies such as:
- Sudden medical bills.
- Dental fees.
- Pet care costs.
- House renovation bills.
- Auto repair fees.
- Funeral costs.
- Rent payments.
Generally, payday loans are small-dollar loans, ranging from a few hundred dollars to a few thousand dollars. However, the exact amount you can borrow with a payday loan online will depend on the lender and your individual financial situation.
How Much Will Payday Loans Cost Online?
The cost of payday loans online can vary depending on a variety of factors, including the lender you choose, the amount you borrow and the length of the loan term. Generally, payday loans come with high-interest rates and fees, so you should be prepared to pay more than you would for a traditional loan. However, by using our calculator you can get a quote for the best deals on the market.
Fees associated with payday loans varies between lenders. Payday loans typically come with fees such as late fees and prepayment penalties. These can range from $10 to $30 for every $100 borrowed. Be sure to read the terms and conditions carefully to avoid being hit with hidden fees.
How Can I Compare The Cost Of Different Payday Loans Online?
To compare the cost of different payday loans online, you can look at the annual percentage rate (APR), which includes all of the fees and interest associated with the loan. The median APR is around 400%, but the APR on some payday loans can even exceed 600%.
You should also compare the total amount you will repay, including fees, over the entire loan term. If you want some help with this, use our loan calculator and we will do the work for you, matching you with the best lender for your unique circumstances.
Are There Any Alternatives To Payday Loans?
Yes, there are alternatives to payday loans. These include personal loans from banks or credit unions, low-interest credit card loans or loans from loved ones such as family and friends. Each of these options come with their own unique advantages and disadvantages.
Can I Get A Payday Loan Online If I Have Bad Credit?
Yes, you can get online payday loans even if you have bad credit or no credit history. However, the interest rates and fees for these loans will likely be much higher than for borrowers with good credit.
What Should I Consider Before Getting A Payday Loan Online?
Before getting a payday loan online, you should consider whether you really need the money and whether you can afford to repay the loan on time. Make sure you have a backup plan to avoid taking out another loan to pay off a previous one, as this can lead you into a debt spiral.
How Do I Apply For A Payday Loan Online?
To apply for a payday loan online, you will need to find a reputable lender and fill out an application on their website. You will typically need to provide personal information, such as your name, address, and Social Security number, as well as information about your employment and income.
How Quickly Can I Get My Money?
Payday lenders typically offer quick approval and funding, with some lenders advertising same-day or next-day funding. This can mean that you will get your money within 24 hours in many cases. However, the actual time it takes to get your money will depend on the lender’s policies and the method of payment you choose.
How Long Do I Have To Repay A Payday Loan?
Payday loans are typically due on the borrower’s next payday. The term on payday loans tends to be between 2 to 4 weeks but some lenders may offer longer repayment terms. However, longer repayment terms may come with higher fees and interest rates.
Some lenders even allow borrowers to renew or extend their payday loans, but this can be very expensive. You will typically have to pay additional fees and interest.
Justine is a full-time writer with lots of expertise and a wealth of experience in the financial world. In particular, she specializes in household income and consumer finance across the United States. Follow her articles for useful advice and top tips, guides on how to save money and lots more.