Posts Tagged ‘using a payday loan calculator’

Why And How To Use A Payday Loan Calculator?

A payday loan calculator is a smart financial tool that helps you calculate the aggregate total cost of the loan before you borrow it. The calculator can also prove to be very helpful in a situation where you are trapped into mounting payday debts and are unable to manage your finances on your own. You can use the calculator to work out your options on how to payoff your debts faster.

Use The Calculator To Find Out Whether You Can Afford A Payday Loan Or Not

Because of the lucrative features that are advertised about payday cash advances, consumers often get tempted to borrow it without doing any research or planning, especially regarding their affordability for such loans. One reason behind this carelessness is that consumers find it very difficult to calculate everything manually on paper. This is where a payday loan calculator can prove to be very handy. There are a few boxes in this calculator, where you have to input the relevant figures, such as the amount of interest (for every $100 of loan for 14 days), amount of loan you are considering borrowing, how many days are left for the due date (your pay day), loan processing fee and additional fee (as applicable). When you enter all the data and press the ‘calculate’ or ‘submit’ button, you will get to see the calculated result either on the same page or on a new web page. The calculator will give you an exact sum of money that you will have to repay on the next pay day, which is usually the due date for all payday loans.

For example, if you are thinking about borrowing a payday cash advance of $500 for 3 weeks (21 days), you should first find out the actual amount of interest and other additional charges that you will have to pay. You can read the details on the official website of the payday loan company in question. Alternatively, you can also give them a call or chat online to find out accurate information about it. But, you should always ask for written proof. In our example, let’s say the interest charge is $30 for every $100 of loan issued for 14 days while the additional charges amount to $40 (a sum of all the applicable charges, including loan processing fee, approval fee, fund transfer fee and others). Now, you can enter all the details in a payday loan calculator and hit the ‘submit’ button to find out how much you will have to repay after 21 days (which is the repayment period in this example). With just a click of your mouse, you can instantly find out that you will have to repay a large sum of ….. for a $500 of

payday cash advance borrowed for just three weeks.

If we do all the calculation manually, we will first have to find how much interest will be charged for three weeks. Since it is $30 for 14 days, you will have to pay $45 ($30+$15) as interest for 21 days. But, this amount of interest is applicable for a $100 of loan. Since you are borrowing $500, the interest will actually amount to five times more, which is $225 ($45 * 5). Similarly, you will now have to calculate the sum total of additional charges for 21 days. Since the lender is charging $40 (per $100) for every 14 days, you will have to pay back $60 ($40+$20) as additional finance charges if you are borrowing the loan for 21 days. But again, this figure applies to a $100 of loan. Since you are borrowing $500, you will be paying $300 ($60 * 5) just in terms of additional charges. Now, you can calculate the total cost of the loan for a repayment period of three weeks by adding the total amount of interest and the total amount of additional charges. In our example, it will be $525 ($225 + $300). Now, you can add this cost to the principal amount ($500). It means you will have to repay a sum total of $1025 ($500 + $525) on the next pay day. This is probably way above what you can afford.

The point here is that the manual calculation is complex, stressful and highly time consuming while you can calculate everything in a flash by using a payday loan calculator.

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