While a Payday loan provider may provide a chart or short explanation of the cost or APR for your loan based on the size of the loan and its term, they are not so forthcoming with additional fees or hidden fees.

Here is a list of fees you want to look for:

  • Rollover Fees: If you are unable to pay the loan by the end of the term, you can pay the rollover fee to extend the term; this generally equates to the price of the original loan but with some providers may be higher. Some states may have a limit to how many times a loan can be rolled over but at an average APR of around 400% you could easily be paying far more in fees than the original amount you borrowed.
  • Loan Origination Fees: This is a fee charged in addition to the interest rate charged. This fee generally consists of charging anywhere from $6 to $10 for every 100 loaned out. It is not necessarily a hidden fee because it is rolled into the amount the borrower agrees to pay before accepting the loan.

    The main concern with this fee is that it can make comparing different lenders difficult. If you are comparing two APR’s and one is slightly lower, it may in fact cost more if that lender charges a loan origination fee and the other lender does not.

  • Collection Fee: If the lender cashes the post-dated check the borrower provided or attempted to withdraw from an account but was unable to receive their full funds, they may charge a collection fee of around $20 that will be added to the amount owed. This is often used as an alternative in states where rolling over a loan is not legal.

Due to the very high costs of Payday loans, it is important to be responsible when applying for one. Avoid rolling over your loans and only apply for loans when it is absolutely necessary to avoid being trapped in a cycle of increasing debt due to rolling over these Payday loans.

The original article can be found here:

Payday Loan Fees and Hidden Costs

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