Applying For A UK Loan Online
Charges
You will normally be charged a flat fee of £29 per £100 borrowed. When applying for a payday loan, your APR will be calculated for you based on the number of days your loan will be outstanding and presented to you prior to approval.
You borrow: |
Total amount payable in single payment: |
£80 |
£100 |
£100 |
£125 |
£200 |
£290 |
£300 |
£375 |
£600 |
£750 |
£750 |
£937.50 |
Typical 1355% APR (30 day loan)
Comparison with Personal Loan Charges
The fixed labour and capital costs associated with offering and underwriting each small loan are the same as offering and underwriting a larger personal loan. With a larger loan principle in a regular personal loan, the lender can cover costs and earn a profit by charging a lower annual percentage rate over a lengthier period of time.
Small principle short-term loans, on the other hand, while costing roughly the same to supply as personal loans, cannot charge equally low rates of interest and expect to cover costs. They must, therefore, charge higher rates of interest over short payback periods in order to be profitably offered. Thus, by their very nature and quite apart from the risk associated with them, small-balance short-term payday loans must charge a higher effective annual interest rate than personal loans to induce companies to provide them.
Yet, the effective annual interest rate compared with a personal loan may not even enter the mind of the borrower. In all likelihood, the borrower cares not what the "effective APR" is on the loan. The real price signal to which the borrower responds is the flat fee that is charged. If the value attached by the borrower to the charges exceeds the value of the principle plus the fee one or two weeks hence, then the borrower will undertake the transaction, pure and simple.
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Typical 17.9% APR Variable