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The True Payday Loan Charges

Written By On 16/01/2013

Payday loans may seem to be a really costly method if we use the annual percentage rate or APR as a guide line. But we should not forget that payday loans are mainly intended as a quick cash resolution that should not be used for more than one month or until your next pay day is due.

The APR does not give the whole story as far as the true charges of a payday loan is concerned. Measuring it annually will inflate the actual cost of the loan because it works with the surmise that the loan will last for one year.

Your judgement should not be clouded by the APR. Your decision should be made on your short term financial situation as it is purely a cash advance for no longer than 31 days. For example, in circumstances where you are short of cash in an emergency, you should estimate the cost of a payday loan against any extra costs that you may get penalised for if you were not able to pay your bills in time. You can feel at ease in applying for a payday loan if the charges of the loan works out less than any penalties you may incur for late payment.