When you decide to take out a payday loan how much it will cost you depends on the lender in which you are borrowing the loan from. Most payday loans however charge a general fee for their loans. The fees range generally from $20 to $30 dollars on every $100 dollars borrowed. For example if you decide to borrow $500, you would owe approximately $560 on your next paycheck. There are some loan lenders who charge a setup fee for each loan. This fee is usually the same regardless of how much money you borrow.
If a company charges a higher setup fee, then many times they will charge a lower interest rate. It truly depends on how much money you plan to take out on your loan and the lender from which you are getting your loan.
Repaying Your Loan
When you apply for your loan it is smart to explore your options and find out the amount that you will have to repay. This will usually give you a pretty good indication of the total amount of the loan. It is also of utmost importance to calculate your expenses and make sure that you will indeed have enough money to pay the loan back when it comes time to repay it on your next payday. You should budget your money and take into account the interest on the loan and add in all of your monthly expenses. Failure to properly calculate your expenses and figure out your finances precisely can be the downfall of taking out a payday loan. You want to be sure and avoid having to take out another payday loan just to cover the expenses on your last one. These types of loans are only designed to be used in times of absolute necessity. They aren’t meant to be used over and over again or for extended periods of time.
Many people encounter problems when they start taking out one loan after another to help cover the expenses of the last one. When you do this interest fees can add up very quickly. Then you could end up in a situation where you may have to default on the loan. If you do that the lenders will then apply even more charges. At this point the money you owe back can escalate very quickly.
To minimize the chances of ending up in worse financial shape than you are already in, it is best to only borrow the smallest amount you possibly can. You also need to budget all of your expenses over the month and be absolutely certain that you will be able to repay the loan when it comes due. Payday loans as a whole can be quite expensive, but they are definitely helpful when you find yourself in a financially challenging time. If you take all of the necessary precautions and do your homework you should be able to borrow a payday loan and to pay it back comfortably without adding any extra financial stress.