Payday Loans Evaluator
Overview
The term 'Payday Loans' has become synonymous for 'legalised extortion'. Unfortunately the companies that offer 'Payday loans' prey on those that are the most desperate.
'Payday loans' may come with an arrangement fee on top of extortionate rates of interest and should be avoided at ALL cost.
Use the loan evaluator below to expose the true costs and comparisons.
The rules and regulations that govern financial payday loans companies state that they must show you the Annual Percentage Rate (APR).
For obvious reasons they prefer to focus on the amount you pay back in total rather than on APR. If you focus on the APR you might realise just how much you are being ripped off!
Modus Operandi
In some aspects this calculator performs the same functions as our Compound Interest Loan Calculator, except the repayment period can be entered in days rather than in months. 'Payday loans' are designed for short-term borrowing and thus on this occasion, using days instead of months seemed more appropriate.
However, another aspect that makes 'Payday loans' different from more conventional borrowing is the thirty-day maximum standard loan period. In the event that the loan needs to be extended the interest that is due on the principal amount is normally paid in full and the principal amount and subsequently accrualled interest paid in full at the end of the next period. This calculator has been designed to calculate the cost of such loan taken on this basis.
Using the Payday Loans Evaluator
- Select the type of calculation to be performed. The default is set to calculate how much a loan will cost. However, if you know how much you are going to borrow and what the total cost of the loan will be, you may choose to select rate to calculate what interest rate is being applied to your loan.
- Enter the loan amount.
- If calculate interest Due (step 1) has been selected you must enter the interest rate to be applied or if Rate (step 1) has been selected enter the total amount repayable (original loan amount + all interest and admin charges etc).
- Enter the repayment period in days.
- Select the applicable type of finance. The default is fixed. Calculations are performed on the basis that any outstanding interest is settled after thirty days and thus not compounded. If compound interest is selected all calculations are performed in the same manor as a typical compound interest calculator except that days are used instead of months.
The results from the above calculator should be used as an approximate guide only.
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