# ONLINE LOANS – APR, INTEREST, FEES, CHARGES, PENALTIES

When applying for a certain loan, borrowers must pay interest, fees, and charges. The APR, or annual percentage rate, is an interest amount that the borrower pays per year. Depending on the loan, lenders calculate the APR using different methods. The lower the APR, the lower the monthly payments will be. A variable APR may change over time, becoming higher or lower. The fixed rates remain the same as long as the loan agreement is in force. Let’s check out some calculations made on payday, installment, and personal loans.

## Single Payment Payday Loan

A Payday loans term may range from 5 to 30 days. The loan amount varies from \$50 to \$1,000 in \$25 increments. Lenders charge \$10 to \$40 per each \$100 amount borrowed. Borrowers may get lower fees by meeting the following requirements:

• Providing ACH authorization
• Building a good repayment history with the current lender.

The APR varies based on the loan term, lender’s fees, amount borrowed, and state of residence. The following table explains the fees and APR for a 14 day cash advance.

* APR assumes a 14-day term.

### How to calculate payday loans APR?

To understand the outcome, let’s see a \$300 loan example. The Payday Loan has the following features:

• Loan amount: \$300
• Total financial charges: \$75
• Repayment period: 14 days

Follow these steps to calculate Payday Loans APR.

1. Divide the total financial charge by the loan principal: \$75 / \$300 = 0.25. It shows how much the borrower overpays for each dollar borrowed. 0.25 converts to a rate of 25%, which means 25 cents for every dollar.
2. Multiply that result by 365 days in a year: 0.25 x 365 = 91.25
3. Divide that result by the loan term: 91.25 / 14 days = 6.517
4. Move the decimal point 2 spaces to the right to transform it into APR and add the percentage sign: 651.7%

The results above are for timely payments! Other fees that the borrower may have to pay are:

• Late payment charge – 5% of payment amount, if delayed for 10 days or more.
• Dishonored charge of \$30.00 for any returned check or electronic payment.
• Loan renewal or extension fee.

If the borrower fails to repay the loan on the due date, an extended payment plan or EPP may be an option. EPP is available once in any twelve months period.

## Installment Loans for Subprime Credit

We made up bi-weekly and monthly payment examples: The APR is 209.9% for a loan of \$2,600. The borrower has to make 36 or 18 installment payments over 18 months.

* Monthly payments are fixed and do not include any additional charges that may be applied.
** Representative APR is based on one of our lender’s terms and conditions.

### When do I have to repay an Installment Loan?

The average period is 18 months. For borrowers who get their income on a weekly or fortnightly basis, the loan repayment schedule consists of 36 scheduled installments. The customers that get income once a month, have to make 18 installment payments. Failing to make payments will lead to penalty fees and a negative effect lower credit score.

### What is an early loan repayment?

DirectLoansLenders’ enders don’t apply penalties for paying off installment loans early. Save on interest by making early payments or pay off extra amounts on the established installments. We encourage paying off a loan as soon as possible.

### Are there any additional charges for Installment Loans?

Each lender has different rules, and the borrower must check this information before applying. According to the Fair Lending Act lenders must disclose all charges in the loan agreement.

### Is there any possibility to cancel the loan contract?

Usually, the consumers may cancel the loan agreement at no cost within three business days prior to the loan activation date and can do so by phone or via email.

### Other fees that may be charged by lenders

• Late payment fees (usually if the payment is over 10 days late);
• Dishonored item charge;
• Refinancing fees if you choose not to pay the loan in full on due date;

## Personal Loans – Rates, Fees, Charges, Calculations, FICO scores

Borrowers with good and excellent credit history may apply for loans at rates from 5.0% to 14.99%. This is considerably lower than credit card rates or other ways of financing. Personal loans are a good way to finance planned, large purchases such as credit cards payoff, home improvement, medical or wedding expenses and can be used for debt consolidation. Below we have provided some calculations on an average personal loan applying APR rates and credit ratings for a loan amount of \$10,000 over a 3-year term.

* Not all consumers will qualify for the presented APR. Base on surveys and statistics from the sources at the bottom of this page.
* The average APR is based on data provided by the main lenders in our network for Q1, 2017.

Personal loans with low rates are often given to prime credit applicants – those having 780+ credit scores. The borrowers with credit scores below 580 may not qualify for a loan or be approved for high APR loans.

### What are the amounts for personal loans?

Personal loans in our network range from \$5,000 to \$35,000. The approved amount depends on the lender, the borrower’s credit history, requested amount, monthly income, and state of residence.

### Rates for personal loans

APRs for loans range from 5.99% to 35.99%. All personal loans have fixed rates and fixed monthly payments. The lending fees and charges consists of the following:

• Yearly interest rate
• Origination fee
• Insurance, that comes with a loan
• Applicable penalty fees, if any

### Personal loans fees

Origination fees range between 1.00% and 6.00% of the loan amount and are charged if a borrower gets a loan.

Early payment fees – Some lenders may charge up to 2% of the loan amount for earlier payments. We suggest checking the loan contract prior to making any extra payments or paying off a loan early.

Application or brokerage fees Applying for a loan via a third party broker may lead to additional commissions. We do not charge any fees for obtaining a loan through our website!

Late payment fees are charged if the borrower fails to make monthly installment payments on time. Late fees and penalties are specified in the loan agreement.

References and Sources