Pay Day Loan

Alternative Credit Planning

Type of Alternative Credit : Pay Day Loan

This type of credit is a small amount of money spent at a high rate of interest, on the agreement that it will be repaid when the borrower receives their next pay check.

Interest Rates and Fees

Step 1) Formulate Interest

Step 2) Determine amount of fees that are included in the loan

Step 3) Add those fees to the total loan

Step 4) Take total cost with fees divided by amount borrows divided by the number of days it will take to repay the loan and multiply by 365 days.

Average APR: 15%

Advantages and Disadvantages

1) It's easy to apply and minimal qualifications

2) Fast!

1) Potential for fraudulence

2) Loans don't last a life time, you receive the money you need, and have only a short period of time to pay them back.

Before You Decide!

Payment plans with creditors, advances from employers and consumer credit counseling are all things to remember and be aware of before using a Pay Day Loan.