If you need quick financial support, you can turn to parabanks for help. They grant quick loans. However, when taking a payday loan, you should be aware of the fact that the money will have to be quickly returned and in surplus. This is due to the fact that banks charge additional fees to the sum borrowed. What is the cost of payday pay and what does it consist of?
Fast loan interest rate
Interest rate is one of the most obvious costs of payday loans. It is always calculated and its amount depends on the parabank. However, they must remember that, according to Polish law, it may not exceed four times the applicable Lombard rate. If the loan company charges higher interest, then there is usury, which is punishable in Poland. The records of the so-called Act on payday loans, i.e. the Anti-usury Act.
Quick loan commission
The payday fee is also a commission charged by parabanks. Lending companies determine the amount of commission on the basis of internal regulations and profitability models for granting payday loans. The commission can be expressed as an amount or percentage and its amount depends on:
- amount borrowed,
- repayment period,
- number of installments, if any.
See how to choose the best loan company.
The payday pay and extra charges
The final cost of the loan is also influenced by additional fees, which include:
- liability repayment insurance,
- the cost of delivering cash to your home,
- extension of the repayment deadline,
- faster loan
- or not timely repayment.
If the payday loan is repaid late, then the parabank may charge not only interest, but also demand reimbursement of the costs of initiating debt collection proceedings. You can find more about the consequences of paying back payday loans in this article. All information about additional costs is included in the loan agreement. That is why you must read it carefully before signing.
How to check the final cost of payday pay?
If you want to know the final cost of payday pay, it is best to contact the bank, which must inform about it. The real sum that needs to be returned to the parabank can also be checked by analyzing the APRC parameter. This is the actual annual interest rate. It tells you the total amount to be repaid. The APRC includes such factors as:
- loan interest rate,
- application processing fee,
- preparation fee,
- expenses for insurance of loan repayment,
- administrative fees
- the cost of customer service at home.
Please note that not all loan companies do not always charge all of the fees listed above at the same time. Many parabanks wanting to get customers offer attractive loans at no extra charge. They offer their first clients, among others payday loans with 0% APRC, i.e. without costs.