The Astounding Cost of Payday Loans

Are you willing to pay big time money for a small time loan? Well, if you are considering taking out a no credit check payday loan, this is exactly what you will be doing. The Annual Percentage Rate (APR) on most no credit check payday loans is in the three to four digit range. This means you could be paying as much as 800 percent on a $200 dollar fourteen day loan. This should be enough to make people run the opposite direction. However, this is sadly not the case. In fact, more and more people worldwide are turning to these predatory lenders just to make ends meet.

CNN Money just released reports of just how much these no credit check payday loans are costing the borrowers each year. Out of all the U.S. borrowers, each person will pay around $520 dollars on average. This is due to several factors. For one, once an individual gets involved with payday loans, he or she usually gets caught in a debt cycle where they end up taking out several loans. Each year, most of these borrowers will get at least eight no credit check payday loans for just under $400 dollars each.

These fees come from the astronomical ARP, extension and rollover fees, processing fees, late or early payment fees, and the list goes on. Fees of $15-$20 dollars for each $100 dollars borrowed are on the low side, but they add up quickly when taking out multiple loans. In fact, being able to find no credit check payday loans with an ARP of 300 percent is a great feat these days. This is because many payday lenders charge well over this and some as high as 800 to over 1,000 percent.

The nice packaging of these fast cash loans makes them almost irresistible to those in desperate financial need. He or she can simply fill out the required paperwork and follow the lender’s steps, then within a short time they have the cash they need. Also, many people feel they are about to meet the loan repayment deadline on their next payday, but they fail to consider their bills and living expenses for that week. This is how the payday debt cycle begins.

Sadly, most payday loan borrowers have to take payday loans with another lender just to pay off the previous one. This keeps the pockets of the no credit check payday loan companies full of money, while their customers struggle just to put food on the table for their family.

 

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