You know that on top of the original loan
amount that you borrow, payday loans will charge you a hefty
sum of other fees & charges that not many consumers
know of.
These are some of the fees and charges you could
be charged if you borrow a payday loan:
Interest Charges
Interest on your payday loan is charged from
the date you borrow the loan, up to date of maturity. Payday loan
lenders who charge more than 60% interest are termed as criminal
under the Criminal Code of Canada. There have been cases where
consumers who have not been able to repay back their payday loans
have been taken to the courts by the lenders. The courts determined
the interest charges billed by the payday loan companies have
been >60% in some cases. The lenders therefore lost their case.
Note: All of the above charges (excluding the
Non-Sufficient Funds Fee) are considered as Interest by the courts.
Admin/Processing/Convenience/Verification
fees
These service fees cost 10-35% of the original
loan amount or $10-35 for every $100 borrowed. Therefore, a $500
payday loan could result in $50-175 in service fees.
Broker's Fee
Sometimes when you walk into a payday loan shop,
the lender will act as a "loan broker" and
get you the money from an unknown lender. A transaction such as
this will obviously include a Broker's Fee.
Collection Fee
If you are unable to repay your loan, a collection
agency may get involved on behalf of the payday loan lender. They
will thus charge you a collection fee on top of the original loan
balance.
Early Repayment Fee
If you pay back the loan before the due date,
you may be a charged an early repayment fee (usually a % of the
total loan balance).
First time set-up fee
Some payday loan lenders will charge you a $10-20
fee if you are a first time customer.
Loan Repayment Fee
Some lenders charge you a loan repayment fee
if you do not pay in cash.
Locate Fee
If the lender mails you a document and it is
returned or calls you when your phone is disconnected, they will
charge you a Locate Fee. This usually happens when a payment is
late or missed.
Non-Sufficient Funds Fee
Ranging from $25-75, this fee is applied when
the post-dated check you gave to the lender bounces and is dishonoured.
On top of this, your bank will also charge you an NSF fee.
Loan RollOver Fee / Finance
Charges
If you miss your first payment due date and
the loan is rolled over to another due date, you will be charged
a loan rollover fee which will include more finance charges. |
