What are the fees on a payday loan?A payday loan is the type of loan that one takes out when they are attempting to get some short term cash. It is monies that are borrowed with the purpose of covering some emergency expense. They are then paid back upon receiving the next paycheck. Thus, they are often known to carry higher interest rates then the average loan that one might take out. At the same time, they provide numerous benefits over those other types of loans as well. Therefore, it is important to examine the real fees behind a payday loan.
The fees that are charged as well as the terms on the loan vary from state to state. Take the state of Tennessee for example. In Tennessee, the maximum amount that one may borrow from Advance America online is $400. The in store borrowing limit is $430. The interest paid on a $400 online or in store loan from this particular company is $60. That means that the borrower pays back a total of $460 to the payday loan company at the end of their loan term (typically two weeks).
State regulations cause the differences in the amount that one ends up paying for their payday loan experience. Some are able to get better interest rates then others simply based on where they live. It is also the case that some are able to borrow larger amounts if they live in certain states rather than others. It is all a matter of what the state government has decided to do in the way of regulating this particular industry.
In the case of Advance America, it is not so important as to how much is borrowed when it comes to determining the interest rate. The only importance that the amount borrowed has is the amount that will have to be paid back. Clearly, the larger the amount borrowed, the more one will have to pay back when the loan term expires.
There are other fees that are charged by any payday lender when it comes to late payment or non payment. These are two things that no borrower ever wants to have to go through. In the event that this does happen though, it is important to read the terms that any particular lender has for these situations. They can vary, but generally the penalties on a late payment are rather high and should be avoided at all costs.