There’s a variety of different costs that you may encounter on your loan, whether that be personal or payday. It’s crucial to be aware of the price breakdown for each loan type, which is as follows:
The primary cost factor on personal loans is interest. This is a rate which is calculated based on your remaining loan sum each day, which is then added up and charged on top of your principal repayment for every instalment. This means that the more you pay, the less interest you’ll be charged. In addition to interest, there are several fees which can be charged to your loan (although some lenders won’t charge one or more of these), which are:
- Ongoing account fees: $0 to $10 each month
- Establishment fee: $0 to $595 one-off charge
- Early repayment fee: $0 to $600+ depending on time left to run on your loan
- Late repayment fees: $15 to $35 for each late repayment
The costs associated with payday loans are more simple than personal loans due to the fact that they don’t come with any interest. Where these loans make their money is through two primary fees: the establishment fee and monthly fees. Establishment fees are capped at 20% of your loan amount up to $2,000 and $400 for loans above that sum, while monthly fees are charged up to 4% of your loan up to a maximum of 48% per year above $2,000.