YourLoans is not a lender but a service that matches you with lenders. So, we don’t charge people using our service a fee. The applications on our site are free of charge. However, lenders we recommend on our network must adhere to regulations governing short-term loans. So, confirm the regulations in your state to understand the types of fees you need to pay to access their service. This website only gathers the information the prospective borrower provides, so we’re not able to confirm the APR you will be charged by third-party networks. Also, our service does not get involved in the decision-making of lenders, including loan approval.
Representative APR Range
An annual percentage rate (APR) is a yearly interest that borrowers pay to lenders. This value is expressed as a percentage, which shows the yearly cost of funds throughout a loan term. The rate includes fees and costs associated with a transaction but does not include compounding. The APR provides a bottom-line number for consumers, which users can use to compare lenders.
The annual percentage rate calculates the percentage of the principal a borrower pays each year by considering things like monthly payments. Also, APR shows the annual interest rate you pay on debt without accounting for compounding interest in that period. The 1968 Truth in Lending Act requires that lenders must disclose the APR they charge.
So, you can find out what your short-term loan will cost throughout its term. To calculate the APR, you need to multiply the periodic interest rate by the number of periods within the year you applied for the loan. An APR is typically higher than nominal interest, as it accounts for expenses accrued, including origination fees, insurance, and closing costs.
Implications of Late Payment
When you apply for a loan, you want to ensure it’s repaid on time as agreed. For most short-term loans, you will attract penalties for late repayment. This only makes your debt more expensive to handle, so you should always focus on ensuring the debt is settled as agreed. Any missed payments or default is recorded on your credit report, which affects your credit score and makes it difficult to access financial products in the future. If your lender sees you’re struggling to settle the debt, they can pass it on to a collection agency. For late repayment, you’ll be charged a late fee. For example, if your loan interest is 16%, the lender can charge you up to 30% interest for the same period. This makes the loan more expensive just by delaying repayment by a few days.
Implications of Non-Payment
Defaulting on a short-term loan like a payday loan can attract different penalties, including bank overdraft fees. Paying the loan late could lead to collection calls, can damage your credit score, and you might find yourself in court where an order is issued for the garnishment of your paycheck. If you have a binding agreement to pay the loan and you attached your wages when applying for the loan, you’re definitely going to lose. The lender will not waste time if the money is due, as they’ll withdraw from your bank account if you gave them access when accepting the loan agreement. If debits fail to go through, the lender can break the charge into small chunks to extract any amount in your account.
You may get extra fees if you pay your loan late. The fees called nonsufficient funds are charged if you lack the money to cover a transaction. In extreme cases, the collection agency could take you to court. This could lead to liens on property and wage garnishment.
The lender tries to collect the debt within 60 days. If the borrower cannot pay the loan within the given time frame, the lender will switch to a third-party collection agency. The collection agency will call you and also send letters regularly until the debt is repaid.
Impact on Credit Score
When you repay on time, your credit is not affected. However, when you default on the loan and the debt is sent to a collection agency, you could see a dip in your credit score. Rebuilding your credit score is a long process, so you should avoid negative credit history by repaying the loan on time.
If your loan becomes past due, some lenders on our network can renew the loan automatically. Check your loan agreement for the lender’s policy on loan renewal before signing the loan agreement. If the loan is renewed, you will get additional charges as prescribed by the lender, and you will also have information about the minimum term. The lender can offer other options besides renewal, including an ability to settle the loan in full later or an agreement to repay the loan in installments.