Share this Mister Wong Digg Del.icio.us Slashdot Furl Yahoo Technorati Newsvine Googlize this Blinklist Facebook Wikio Print E-mail Tags payday laons short-term laons terms and conditions payday loan

Payday loans are short-term loans that are relatively easy to get. These loans are intended for emergency cash requirements, such as sudden expenses, and the borrower usually has to repay the loan next payday. Unfortunately, there have been complaints by some consumers regarding the high interest rates and charges of payday loan companies. Since the payday lending industry is still young, regulations are not yet firmly in place and many companies have tried to take advantage of this situation. One way to protect yourself is to know the usual terms and conditions.

Schedule of payment

The loan term is the length of time for which you are borrowing the money after which you have to repay it including fees and charges. It should be noted that loans with longer terms have higher interest rates and fees.

Late payment

This is an important condition because it tells you the additional fees and penalties that you have to pay if you fail to repay the loan when it is due. The problem here is that you are often required to issue a post-dated cheque. Thus, you will also be incurring overdraft charges from your bank when the payday loan company tries to encash your cheque.

Finance charge or annual percentage rate

It is vital to check this value when comparing payday loan providers. A difference of 10 percentage points represents a difference of $60 for a $600 loan.

Prepayment

The prepayment term allows you to repay the loan earlier than the due date. Usually, a certain fee is required for prepayment but the borrower may still save some money by reducing the interest that has to be paid.

Default

Failure to repay the loan according to the contract will mean that the borrower is in default. This will indicate the actions of the company if you get into this kind of situation.

Add comment

Name (required)

E-mail (required)

Notify me of follow-up comments

Refresh

Send

Cancel