While advocates of payday loans say they grant loan access to people with poor or no credit, critics say these short term" loans unfairly target minority populations and trap people into lengthy debt cycles. Unaffordable repayments. Payday loans are an expensive way to borrow money. Check the size of each repayment and ensure you will be able to pay on time. If you can't afford the repayments then you will end up paying late fees that will only make your financial situation worse.Even better, if you can pay off your charges in full before your credit card's due date, then you can likely avoid interest entirely. That's because most credit cards offer a grace period on interest fees, which means you won't be charged interest on your balance if it's paid in full before the end of the grace period.
People can apply for loan amounts up to $2,000, which come with fixed fees that are regulated by the government body ASIC. Fees consist of a 20% loan establishment fee and a monthly loan fee of 4%, which are calculated based on your principal. Most payday loan lenders will charge the maximum possible capped fees. However, some lenders may have more affordable options, so it's important to compare payday loans prior to submitting an application.
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