Sunday, June 15, 2014

Short Term Loans - What Are Typical Fees for Loans under $1000

Short term loans may be in form of payday loans, peer to peer lending, or installment loans. The payday loans also referred to as deferred advance loans, check advance loans, cash advance loans, deferred deposit check loans, or post dated check loans usually attract higher interest rates when compared to the installment loans. The payday loans range from somewhere between $100 to about $1500 dollars. For the short-term loans under $1000 and for that matter, payday loans, the fees charged range from somewhere between $15 and $40 for each part of $100 borrowed. This fee amount can vary from one payday lender to another, and it is advisable that consumers do a thorough research to establish the lenders who are charging lower fees. While this fee is often charged for the next paycheck, meaning fortnight, it can be annualized to reflect what a consumer could pay if he or she borrowed for 12 consecutive months or rolled over the balance for that time frame, assuming there is no charge levied for rolling over. The short-term loans are just mean for that- short term period! However, because of the nature of these loans, many people are not able to settle their first, second, third, or even forth payday loan in time meaning they will keep on rolling over balance, something that extends the time in which one borrows these loans. For the typical fees of these loans, they may reduce as the amount borrowed increases. Typically, fees per $100 will begin dropping on payday loans that are larger than $500. While these fees are typically less than what many customers could expect to pay for things like having a utility disconnected, bouncing a check, or paying credit card bill late, consumers ought to understand that they should not take more than they can pay in their next paycheck. This is because these are not intended to be long term or medium term loans. If you were to annualize the charges or fees levied against payday loans, you would be surprised to discover that one could end up paying a lot of money in yearly basis. The equivalent annualized percentage rate designed for the payday loans as well as other short term installment loans could range from somewhere between 547.5 percent to 999.45 percent, and this is based on the amount as well as the length of time of paying for the loans. While this annualized fee amount sounds large, consumers should understand that these credit facilities are only meant for short-term payment, and for that matter, two weeks or a month. When you annualize other fees levied on things like returned check or late credit card payment, then you realize that payday loans really charge lower amounts. For a returned check fee that has a charge of $32 for an equivalent $100 check, a consumer would have to pay an annualized fee amounting to an APR of 2336 percent while a credit card late payment charging $37 would amount to a charge of 965 percent. In the same way, a typical $46 dollar reconnect fee charged by a utility company would attract APR of 1203 percent.