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Low Fee Payday Loan

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A low fee payday loan can be difficult to find but it is possible. Payday loans are generally granted without collateral from the borrower. These loans are considered high-risk loans, therefore they carry a higher interest rate than other loans. Common fees on payday loans are upwards of 20 to 30 percent. Many payday loan services charge a set number of dollars per 100 dollars borrowed. For example, if you borrow $100, you will be charged $35 for each $100 borrowed. $30 of that is allocated towards “fees.” Only $5 of the $35 is applied to the principal (the amount you borrowed). The entire amount plus the fee is then due upon an agreed date, usually when the next paycheck is scheduled.

Payday loan companies also rely on direct deposit – this is how they can get the money to you much faster. For repayment, the payday loan company will use electronic funds transfer (EFT) to get their money back. This means they will make an electronic withdrawal from your bank account.

Low fee payday loans are sometimes offered initially to draw in new customers. However some payday loan companies keep their fees lower than their competitors to bring in more customers. When choosing a payday loan company, check local venues and online venues for a payday loan company with lower fees. Make sure you understand how each particular lender works – some allow the borrower to make payments, others require that the loan is paid in full on the due date. If the payday loan company allows the borrower to make payments, check to see if a second fee is going to be charged. The second fee may be just as high as the first fee in some cases.

Many payday loan companies are now on the Internet, which makes it easier to compare fees, allowing the borrower to choose a lower fee payday loan. Most of the Internet payday loan companies will require direct deposit and will require you to fax information such as paystubs and bank account information to them.

The borrower can also help alleviate fees (indirectly) by signing up for a lender’s referral program. The amount the borrower can earn from each referral varies, with some sites advertising that they will pay $100 for referrals.

Before choosing a payday loan company, check the company through the Better Business Bureau (BBB) to make sure that the company is reliable. And never sign any document or agree to any terms if you haven’t read the fine print completely or if there is any part of it that you don’t understand.

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