Bad Credit Loans – Direct Lenders

Direct lenders for bad credit loans charge a lot more than conventional lenders at the bank or other financial institutions. As a matter of fact your credit card interest rate seems a lot more attractive than an interest rate charged by payday lenders. In majority of cases you can pay up to 30% annually in credit card payments. When it comes to payday loans the interest rate is in the neighborhood of 1000%.
Example of direct payday lender charges:

  • To borrow $500.00, you will pay a $175.00 finance charge plus the amount borrowed.
  • Your total repayment will be $675.00.
  • The annual interest rate for this loan is 912.50% APR.

The above calculation is based on a $35 fee (for each $100) and a 14 day repayment. If a borrower decides to go with a 70-day repayment, the calculation is as follows:

  • To borrow $500.00, you will pay a $175.00 finance charge plus the amount borrowed.
  • Your total repayment will be $675.00.
  • The annual interest rate for this loan is 1,825.00% APR.

When applying for a loan on sites like this one, submit your application and when you’re approved, talk to the lender about a lower fee. If you lower the fee to, let’s say $25 (for each $100 borrowed), the calculation for a 14-day term looks as follow:

  • To borrow $500.00, you will pay a $125.00 finance charge plus the amount borrowed.
  • Your total repayment will be $625.00.
  • The annual interest rate for this loan is 651.79% APR.

In fact it doesn’t matter whther you take out a payday loan for a week or a month. The fees are the same – it will cost you the same. The problem is when you want a loan for two months, then you will have to pay another fee of $175. This is a true killer, because your $500 loan costs you $350.

  • To borrow $500.00, you will pay a $350.00 finance charge plus the amount borrowed (14 days)
  • Your total repayment will be $850.00.
  • The annual interest rate for this loan is 1,825.00% APR.

Bad credit loan direct lenders will love you for that. Any further extensions will make the matter much worse.