Having made the decision that a payday loan is right for you, there are some additional fees and charges that may be imposed on top of the interest charged to you for taking out the loan. If you need an explanation of how the interest rate charged to you is worked out then please refer to our helpful guide titled Payday Loans APR Explained as this should help your understand APR without the need to be a mathematics expert!
Below are the additional fees that you may be charged when taking out or paying back a payday loan. Please read through this guide to ensure you understand all possible fees and charges before you take out a loan.
Application Fee – You will not be charged an application fee by most of the better run and operated payday loan companies. Applying for such a short term loan is similar to asking your bank for a loan, they will require you to fill in an application form and they will then review the information you supplied to ensure you can afford to pay it back on time.
Be aware that you may accidently and unbeknown to yourself stumble on a website that appears to be a payday loan company, but in fact they are a loan broker. These companies are not going to give you a loan themselves, instead they will make you fill in an application form and will then give you a range of companies who, based on your circumstances, are more likely to give you a loan.
There are some websites who will charge you something known as a brokers fee, you need to avoid such sites as there is usually no benefits to be had from apply for a loan from such a site and they will charge you often without it being obvious they are doing so, simply for filling out their online application form!
Please read through our Avoid Payday Loan Broker Fee Charging Websites article, as this will help you spot which websites these are and will often save you being hit with a large payment and one that does not guarantee you will get a loan!
Interest Rate – The amount of interest you will be charged will be shown to you before you take out a payday loan, we have, as mentioned above put together a guide called Payday Loans APR Explained, so have a look through that if you are struggling to understand how the interest on such a loan is worked out!
Transmission Fee – A transmission fee is an additional charge that you will only have to pay once you have been approved for a payday loan, and your money has been sent to you. This charge is usually a modest amount of just a few pounds, but it can vary from site to site.
A transmission fee is charged to allow your funds to be sent rapidly and often in a couple of minutes. As this is often going to be added to your loan amount interest may be charged on it, once again this will vary depending on just which payday loan company you choose.
Extension and Rollover Fee – Another fee you may be charged if you have opted and have been given permission to extend or rollover your loan for another month is an Extension Fee. This is added to you loan amount and will allow you to pay off your loan at a later date instead of the original repayment date.
You do of course need to get in touch with the payday loan company should it look like you need to extend or rollover your loan and when you do they will all you through the procedures and discuss any additional fee or charges.
Late Payment Fee – You could find that if you are late paying back you loan a Late Payment Fee is going to be added to the amount of cash you end up paying back. Many payday companies can waive this charge if you let them know you are going to be making a late payment, but some companies won’t.
If you are having problems and are unable to make a payment on your pre-arranged day, please have a read through our I Can’t Pay Back my Payday Loan on Time article, as this will explain what you should do when faced with such a situation