Fast non-bank loans have very expensive opinions. It is often said that the price for a quick decision, a minimum amount of formalities and a flexible approach to less credible customers are just the high loan charges. Is this theory reflected in practice? How much does a popular payday loan actually cost?
Only a few years ago there was real Ebrado on the Jennybank loan market. Lack of relevant legal regulations regulating the maximum costs of borrowing money meant that lenders determined their amount themselves. Just like the amount of debt collection fees and commission for extending the repayment date. It often turned out that the monthly cost of recovery exceeded the amount of the loan itself. However, the situation changed dramatically in March 2016 after the amendment to the Anti-usury Act.
What about other fees?
Before the new law entered into force, almost every loan company offered customers the option of extending their repayment dates. Depending on the length of the extension, the commission for such an operation was between 20 and 40 percent of the loan amount. Extending the repayment deadline was therefore one of the most important sources of profit for lenders. Currently, due to the maximum cost limits, it has become completely unprofitable. The extension fee would have to ‘fit in’ the cost limit. And this means the need to reduce the commission, which would be extremely unprofitable for loan companies. However, clever lenders have found a way to bypass embarrassment. Instead of extending the repayment date, they offer their clients a refinancing loan, i.e. a loan to pay their current liability.
Refinancing is usually provided by a friendly loan company. A condition for taking out a refinancing loan is the prior payment of commission. Unfortunately, relatively high. Refinancing costs are comparable with the costs of extending the repayment date. They can therefore range from 20 to 40 percent of the loan amount.
Payday loans for free
Not everyone knows that many loan companies offer payday loans, whose APRC is 0%. Impossible? And yet. Such products are directed only to new customers who have never borrowed money in a given company before. When you apply for a free loan, you will not pay any commission, interest or any other fees. If the commitment amounts to PLN 1,000, you will be obliged to pay back to the lender exactly the same amount.
The only condition for non-payment is timely repayment. If you are late with your refund, the lender will have the right to cancel promotional payday loans and charge you standard fees. Delays in repayment may also result in accrued interest for late payments of 14 percent per annum. If you want to eliminate any costs, make sure you can pay back the loan on time.
Most loan companies have included loan calculators on their pages that allow you to calculate the cost of borrowing money yourself. To calculate how much you will pay for payday pay, specify your preferred amount and repayment date. Using the calculator, you can accurately calculate the amount of borrowing costs, splitting the amount into individual elements, such as interest or commission.