|A short-term personal loan of $100 and a loan fee of $15-$35.||391%-851%|
|The fee for a $100 returned check is $33||860%|
|A credit card balance of $100 requires a late fee of $37||965%|
|$20-$45 reconnection/late fee, and $100 utility bill||521%-1,173%|
*This table shows typical fees-some lenders may charge higher fees and additional fees.
APR: Depending on the loan amount and duration, the equivalent annual interest rate of payday loans and other short-term installment loans is between 54.75% and 99.45%. Larger loans with longer repayment periods have lower interest rates. Although this sounds big, it must be considered that these loans are only used for a very small time frame (usually 2 weeks). After annualizing other fees in the same way, for a check of 100 USD, a refunded check fee of 32 USD, for a credit card late fee of 37 USD or exceeding the limit, a fee of 965% is charged, and for ordinary fees, it is 1203% of the $46 reconnection fee charged by APR Utilities.
Financial meaning: Short-term payday loans mean: short-term. Each borrowed $100 is up to 500 dollar.00, and the usual fees range from $15 to $40. For loans over 500 dollar.00, the cost of every $100 starts to fall. The fees are usually lower than the borrower’s expectations for bouncing checks, disconnecting utilities or delaying payment of credit card bills.
Method of collection: If the loan is in arrears, the first attempt will be made internally, mainly through the telephone. This is an attempt to formulate a repayment arrangement, which requires full consideration of the borrower’s financial situation. If all internal collection attempts fail, the lending institution can send the loan to a third-party collection agency in an attempt to recover the funds lent in good faith.
Impact of Credit Score: In the short term, payday loan lenders may rely on any of the three (3) major rating agencies-Equifax, Experian or Transunion. Generally, the borrower does not have to worry that the determination of the loan request by the results of these institutions may affect its score, but this determination is entirely determined by the payday lender, which may cause the lender to submit the borrower’s loan request, or to any subsequent Payments under loans provided by these institutions. Short-term lenders can also rely on their own scoring criteria, which are usually based on income and repayment ability and the repayment history of previous payday loans between the borrower and the relevant lender or other payday lenders.