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What are the respective rates? While some moneylenders charge a flat-rate fee for a loan based on
the amount, others will charge more or less depending on the length
of time until your next paycheck. Usually the rates are pretty high,
and an example of typical rates can be found here: http://www.checkcity.com/?ReferredFrom=GOG.
Fees charged range from $15 to $30 on each $100 advanced, and they can
be higher. Not only that, but sometimes when the due date comes around,
you might not be able to pay back the full amount, in which case lenders
often encourage their customers to do what is known as “rolling
over” their paycheck. This means that the person can borrow for
a second time, extended to the date of the next paycheck, which leads
to double fees. For example, if you borrow 400 dollars for a flat fee
of eighty dollars, and roll over till the next paycheck, you have accrued
fees of 160 dollars on an amount of 800 dollars, and this is without
consideration of raised rates for the amount of time a loan is borrowed.
The more reputable lenders, however, won’t let a customer roll
over their rates more than once or twice, but beware of getting in a
rut if the lender allows unlimited rollover and you continue to borrow
on more than a very short-term basis. This is an easy way to dig yourself
deeper and deeper into debt. |
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