Understanding the real interest cost of pay day loans
Pay Day Loans
- Loans that must be repaid by the time you receive your next paycheck are known as pay day loans. This type of loan is short-lasting.
- Unfortunately, in many cases, people are unable to repay the amount borrowed within the set deadline so the amount interest on the load accumulates. The amount of interest on a $1000 loan will be from $100 to $300 depending on the company and interest rate. If a small loan requires twelve months or more the final figure is $4,500 to well over a whopping $10,000.
- This type of loan will not benefit those who wish to improve their credit. Pay day loans do not submit information to credit reporting bureaus unless the loan is in default.
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