Payday Loan APR

Today, the majority of people in the United States know what APR is, while understanding this is something attached to mortgage loans. However, a payday loan APR also exists, which is not understand as well.

There are many states that have regulated the maximum APR for payday loans and this is a really good thing. It’s not going to be close to what you are thinking for an APR though. Try looking a lot higher because a short term loan often has a very high APR.

Understanding an APR

Some people don’t know what APR is, or what payday loan APR is - or if it’s different at all.

APR is the acronym for “Annual Percentage Rate”. This annual rate is what is attached to a loan. In the case of something large, perhaps a mortgage loan or even a smaller loan for business purposes, the percent of the APR is generally low. The reason is that these loans take longer to pay back to the lender.

On the other hand, a payday loan APR is somewhat different.

How Does This Work?

Payday loan APR is a bigger number than the home loan APR because it has one of the highest interest rates on any sort of loan because it is so short term. These loans are normally between 7 and 14 days so they are very short so you normally only pay around $10-$40 in interest.

You can normally find APR numbers between 250% - 390%, which is rather large, until you consider that you’re borrowing just a small amount, and you’re going to pay it back quickly.

There are some states that have put a cap on the highest possible APR that a Payday loan company can use. They regulate how long the loan can be and if it can be renewed or extended in any way. Some states have hugely strict laws and some have none at all.

When You Are Looking For A Payday Loan

When you go looking for a payday loan APR, there are a few things that you should keep in mind. That’s the APR. The lower it is, the less you will need to pay when you are getting ready to pay your loan.

Watch out for fees, too - while the APR might look attractive at first glance, finance fees will end up costing you twice what you’re paying in interest. Keep your eye out for the best companies that offer the lowest fees, and interest rates.

Remember…

Of course, borrowing money is serious business so it is important to choose one that can get the payday loan APR that will not put you in further debt.

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