Rates and terms for short-term $700 payday loans
$700 short-term loans can be a great solution for people who need fast access to cash. Sometimes, life throws unexpected expenses at us, from car repairs to home maintenance or medical bills, and those emergencies often don’t wait until our next payday to strike. Short-term loans provide a quick way for borrowers with less than perfect credit histories to gain the money they need in these difficult situations.
The typical two week term of a $700 payday loan will cost the borrower anywhere from about $65-$85 per month over that period of time depending on how much interest they end up paying APR . The annual percentage rate (APR) is the cost of borrowing one thousand dollars for a year. The APR is usually expressed as a percentage and includes the interest rate and other fees, which can vary depending on the exact loan situation. Payday loans must be paid back in two-two weeks, but customers frequently roll over their loan, taking out new payday loans to pay for previous ones. If they do this too many times in a row, they run into trouble paying back all their debts when the original period of time comes to an end. In these cases, borrowers often have accumulated so much debt that they cannot afford to pay it back at once. Instead of being left with no money when their next paycheck arrives, borrowers will take out another short term loan from a different lender just to cover all their monthly expenses until their next payday comes around. This cycle can be repeated several times before the next payday finally arrives and borrowers are faced with the whole problem again.
Payday loans cost about $20 for every $100 borrowed, so a $700 loan will cost $140 over two weeks. So if you only borrow the money and fail to pay it back on time, you’re going to end up paying double the amount that was actually borrowed. Payday lending companies justify these rates by claiming that they need them in order to cover overhead costs and stay profitable. The average annual percentage rate charged on short-term loans is 391%. Many lenders also charge as much as an initial fee of 20% or more as well as a monthly servicing fee of 5%. In addition, many providers of payday loans require a postdated check from the borrower, who grants permission for the lender to debit his or her bank account on the day the loan is due. If payments are not made on this day, fees of up to $25 per every $100 borrowed are added to the borrower’s bill along with another fee as high as 5% just for paying late.
An online company that offers cash advances on credit cards requires its borrowers to fax their information over before they can be approved and receive money. This type of quick loan would normally cost between $20-$30 in fees alone if charged by a traditional brick and mortar establishment. The total amount owed (including interest and fees) is due within 14 days of signing your agreement with an online loan provider.
Moving forward with the $700 dollar payday loan example mentioned above, if you’re borrowing this sum of money on a credit card, it’s likely that some kind of interest will accumulate over the course of your monthly payment cycle. If you don’t pay off this balance within 21-30 days of signing your contract, interest can be charged retroactively on all purchases made during the time between the first charge and the point at which the bill was paid in full. This means that an additional 20%-25% or more may suddenly appear on your final statement each month. While many lenders offer low rates to attract customers, these rates tend to jump higher for those whose credit scores are lower than 720.