Do Payday Loans Have High Fees?

Payday loans often receive the reputation for high fee’s and a short repayment period, is this reputation justified? Yes, that is the short-term loans model, sorry.

Payday loans offered through our site carry a fixed fee, depending on how much is borrowed, please see our charges page for a full breakdown. This roughly equates to £25 per every £100 borrowed. Representative Example: Borrow £300 for 65 days with one repayment of £78.00 and one repayment of £378.00. Interest: £156.00. Interest rate: 292% pa (fixed). 1294.1% APR Representative. Although depending on the lender you are able to spread out the payments over a two-payment period time-frame, although this will be a more expensive option.

If saving on fees is what you are after, then take a one-time repayment on your loan. This will give you the cheapest rate available as your lending time is the shortest possible. This is how to receive lower fees on online loans, to take them over a shorter space of time. Now this might not be suitable for your situation.

Yes, it is true that the fees for a short term cash loan will be higher than a one-year loan, however, they are different products, so hard to compare. Ultimately you need to consider your unique scenario and what is best for you.

Advantages of short term credit

• Quick results, loans are approved online within the hour
• Quick funding, loans are often funded on the same day*
• No meetings or face-to-face interviews
• Minimal credit check/background check

Disadvantages of short term credit

• Higher fees (over the same period) than long term loans
• Shorter repayment period
• Only small amounts available

Managing your money

There are many ingredients to a happy life; no one should underestimate good health and finances to live a comfortable and satisfying life.

Conversely lack of finance leads to problems that are certain to be stressful. The recession that has rescinded in the last couple of months was a stressful time for many people including some that had seemingly built up assets that would guarantee that comfort and satisfaction for their remaining years. The environment has certainly changed and many people should be reflecting on the lessons it has taught society. It is not an experience that anyone wants to go through a second time.

In order to best avoid that you should sit down and look at your finances, income and expenditure to examine whether you are handling your money well and whether there are things you should be doing, both to increase your regular monthly income and to cut out waste without it necessarily meaning sacrifice.

At present there is little need to be paying high rates of interest even for those people with a poor credit score (calculation based upon personal credit history.)

Regular Income

While many people lost their jobs during the pandemic, the unemployment figures have halved since its low point. Now the dust has settled those still in full-time employment can feel fairly certain that they can remain so, and there should be chances for moving up in terms of income even if pay rises within individual organisations are not rising as fast as many would hope.

There are an increasing number of opportunities to earn money in your spare time; the internet offers the chance of trading or providing services to create a second income. If when you write down the income side in your budget you can add to your regular pay then that is likely to give you more leeway when it comes to expenditure.

Expenditure

That is no reason to waste money of course but a chance to create an emergency fund or contribute more towards retirement must always be worth investigating.

It is always worth looking at your expenditure from time to time. There are standard monthly bills that everyone faces, typically insurance and utilities that need to be reviewed to ensure you are getting a good deal. If you compare like for like then why pay too much? Similarly you may be paying interest on credit cards and loans each month; if you are paying out on credit card balances then you will be paying at a level which is unnecessarily high. Imagine if you could reduce that expense by replacing a credit card balance with a consolidation loan at a cheaper rate you will make a significant monthly saving.

Online Lenders

Today’s online lenders are happy to do business; they rely much more on an applicant demonstrating a regular income and the ability to repay a loan in full and on time than an applicant’s credit status. This has opened an avenue to finance that appeared to be closing because of the conservatism of traditional lenders who had taken on toxic debt pre-recession and were nervous about doing so again.

Those in search of a happy and stress-free life and needing to repair their finances to do it have a chance. If they can earn more money then their task is easier. When it comes to spending every item should be examined with the aim of creating a regular surplus to put towards the future, short term an emergency fund and longer term retirement. It is an unnecessary waste to be paying too much interest on loans, credit and store cards. It could not be simpler to go online and solve that waste immediately.

Are the fees the same at the weekend for payday loans?

The fees for emergency loans are the same no matter when you apply for them, that being a weekday or a weekend.

We know emergencies have no consideration for when they pop up, so therefore our loans are consistent and will not change price whether you apply at 9am Monday or 4am Saturday.

Weekend cash issues

At weekends there are the kids who have their own commitments and may need their parents to act as taxi drivers. ‘Wait until I retire’ you might think. One thing you will certainly have when you finally retire from your full-time job is time. The question is whether you will have the money to live a comfortable life and do all the things you’ve always wanted to do?

Debt seems to be a major issue. Many of the respondents admit to credit card debt and being currently concerned about paying it off. Those with regular income should be able to get themselves a personal loan as long as they can demonstrate their ability to repay the loan. The intention of taking that loan is solely to pay off credit card balances that are incurring a much higher rate of interest.

Even with such debt paid off, many don’t see how they are going to maintain a decent lifestyle never mind enjoy hobbies and travel.

Younger generation

It seems however that the situation is much better amongst the younger generation with two thirds actually doing something now about savings.

The younger generation of course often has an existing burden because many are carrying debt in the form of student loans but it seems conscious of the need to save as well. It does not mean that they are optimistic about being able to retire early. Part of their pessimism may come from the current situation with the Social Security System which is currently under funded to the extent that benefits may drop by up to 25% in the mid-2030s.

Unfortunately many are underestimating how much they may need in retirement. £36,000 per year is a popular figure but a misapprehension; the Bureau of Labor Statistics says the figure currently is nearer £50,000.

It seems that very few in any age group are prepared for retirement at the level they want. The ones that are in the best position to do something about it are those that really understand there is a problem and want to do something about it.

Starting point

The starting point whatever your age is to get rid of waste and that certainly means the level of interest charged to any credit card balances. If you have a regular income and your application for a loan is realistic, you will find that you can pay off any balances and repay the loan in instalments. The rate of interest charged on personal loans is much lower than that credit card companies charge.  Online lenders have introduced a simple & easy application procedure done entirely online asking for simple basic information. Approval is likely to be in hours and the money requested transferred into your checking account fairly quickly afterwards.

How you then use your credit cards in the future is crucial. You must be certain that if you use it during a month you must know that you can afford to settle the monthly statement in full, and then proceed to do it.

Your budget should now have a single payment for repayment of debt and hopefully a surplus that increases because of the personal loan substitution. That should not stop you investigating other possible savings on such things as utilities and insurance. That surplus should be made to work for you and perhaps the best thing to do is to automatically have a figure transferred out of your account on a regular basis.  The money will build up over the years towards your retirement, your hobbies and your travel plans.

Cash loan alternatives

Free time is awesome, but we are buying a new home in a few months.  And we decided that we would like some more money in the bank before laying out 20% down, closing costs, and basic moving expenses.  Or as Mr. BFS put it, “I like money.”  So we are looking for ways to make a little more money on the side.

Here are a few methods we are using right now:

• I started commenting for hire (still have 25 spots left).
• We are renting out our spare bedroom.
• I am finally finishing up the “How I Make Money Blogging” ebook I started more than a year ago.  Should be released in a couple of months.  Woot!!!
• Mr. BFS just jumped at a summer job working at a bowling alley.  He fixed bowling machines in college, so he’s returning to a fun side job.
• I am Gumtreeing anything we don’t use for the dual benefits – more money and we won’t have to move it in a few months.

Here are a few other things that I have been thinking about:

• Pet-sitting again.  We were receiving £15-£25 a night per dog.
• Baby-sitting again.  About two years ago, I was bringing in about $10 an hour to watch a couple of cute kids every Friday and Saturday night.
• Side job in customer service.  Maybe a part-time job as a receptionist or working at the local Orange Leaf Frozen Yogurt store.

Longer term loans mean more meetings, time and effort

Compared to a small cash loan acquired through the Internet, a long term loan, say over the course of one year, will be more labour intensive to receive. You may receive a better deal in terms of interest rates, but you will pay with meetings, approvals and face-to-face appraisals.

If your credit is not the best, a short term loan can be an easy to access barometer of how your credit is at the moment. You may not be eligible for either, so what’s the point worrying about fee’s? See what’s out there, what suits your scenario is and more importantly what is available to you. Good luck.