Getting a payday loan online is easier and faster and doesn’t require anyone to go the shady looking storefront where some trained professional would convince you to take on unnecessary add-ons or track on illegal policies. Nevertheless, in reality people taking up payday loan online end up in much more worse conditions that they would have been if applied in person.
How does the payday work?
The payday lending works like this: the borrower requires loan for a small amount of some few hundred dollars and takes a loan with repayment period of 10-14 days. At the end of the term, the borrower is supposed to pay the whole amount on plus a lump sum fee that often equated to an APR of more than 100%. According to the sources, it is said that a standard storefront would charge a fee of $55 for a $375 loan and the online loan lenders take up to $90 for the same loan amount; that’s an APR of more than 650%.
Structure of payday loans:
Payday loans can also be in form of installments that can be repaid back in smaller amounts over a slightly longer period. Even then, the online loans cost more than the storefront. Typical storefront lenders will hit you an APR of 300% while online lenders charge up to 700%. Continue reading Why do Online Payday loans cost more than sketchy storefront?