When money is needed quickly, we don’t always have time to accurately compare the cost of the loan. This is a big mistake that can cost us a lot. Is it enough to pay attention only to the interest rate on non-bank loans offered? It turns out not.
Payday loan have already permanently inscribed in the image of the Polish financial market. Currently, they are widely advertised by many companies, which means that as a potential customer, you have a lot of choice. Unfortunately, a varied offer means that you need to be vigilant and – before you sign the contract with the selected company – carefully check whether it is the cheapest offer available on the market. Otherwise, you’ll simply overpay.
When you take out a loan, payday loans for the first time
When applying for a loan without BIK for the first time, you do not have to check the costs – you will probably be able to take a free loan. In this case, you do not have to worry about the interest rate on the loan or additional costs, e.g. for processing the application. By borrowing e.g. $ 1,500, you will pay exactly the same amount.
Should you fear hidden costs? No, because most companies do not allow themselves, knowing that such information can ruin the laboriously built position on the market.
Interest is not everything
Very many people make the basic mistake of using only interest rate when choosing a loan. In the case of loans without BIK, i.e. loans granted for a short period, the value of this parameter is not crucial, although it is certainly not worth ignoring.
Differences in the interest rate on short-term loans in various companies can be significant. Therefore, it is good for you to check how much interest on the borrowed amount will be calculated by the company with which you sign the contract.
Commission for granting a loan without BiK
Before you apply for payday loans, you must be aware that companies that grant such loans earn the most from the commission they charge. And this is what you should pay special attention to. This is clearly seen in the example below.
When applying for a loan of $ 500 for a period of 30 days, you will pay approximately $ 4 as interest. The maximum commission that a non-banking company will be able to collect is $ 141.60. Why can’t the commission be higher? This is related to the amendment to the anti-usury act, which the loan companies must comply with. From your point of view, as a potential customer, this is very good news – it’s cheaper than it was.
Since the amount charged by non-bank companies as interest rates is so small, it should not come as a surprise that they compete with each other for clients by the amount of commission charged. You should be aware of this.
APRC – why should you pay attention to this indicator?
What is the abbreviation APRC? We are talking about the Real Annual Interest Rate. In the case of short-term loans, APRC is often even several thousand percent. This indicator is important because it shows the total cost of the contract. Since non-bank companies are required to provide APRC for individual loans on their pages, you will not have a problem comparing offers that interest you in this respect.
APRC doesn’t tell you much? So use the cost calculator. Such you will find, among others on the websites of loan companies. After determining the amount and period for which you want to borrow money, you will receive information about the amount you will have to pay.
The amount of the registration fee
You are certainly aware that the loan company will want to verify the data you provided in the application for funds. How is this done? You will be required to send a certain amount to the bank account, usually 1 gr. When should you be cautious? When you have to pay a higher amount as a registration fee, e.g. 20, 50 or even 100 $. In this situation, it is very likely that you are dealing with a dishonest company that – even after you have made a payment – will not grant you a loan.
Regarding the registration fee, please also remember that an honest company will not only require the transfer of a symbolic amount, but will also refund it after confirming the data.
Extension of the repayment deadline and possible debt collection activities – how much will it cost you?
When you take out a loan, you certainly assess your repayment options. However, it may turn out that your employer is late with your pay or your account has not been funded from the source you were expecting to receive money from. To be prepared for various options, you should check in advance how much it will cost you to extend the repayment date of the payday loan.
The above information can be found on the website of the company with which you intend to sign a contract. Keep in mind that after the provisions of the amended Anti-usury Act come into force, not all companies offer customers the option to extend their repayment obligations. It’s good to make you aware of this.
You should also pay attention to the amount of the reminder costs. There are companies on the market that charge the client a small fee of several zlotys for reminding the customer about the repayment deadline. Some, however, have a different policy, charging high fees for sending the reminder.
If you consider all of the above costs, then you will choose the cheapest payday loan. That’s what you mean, right?