Are you going to take a quick payday loan? Here are 4 terms you need to know

Do you go with the idea of ‚Äč‚Äčtaking a quick payday loan? Perhaps to finance the dream vacation or to pay an unexpected bill on the car? Regardless of your situation, there are some expressions that you need to know before you record a quick payday loan. Once you have read this article, you have the most important knowledge.


OPEN – Annual percentage rate

OPEN - Annual percentage rate

Many do not know what ARE means. Indeed, many do not know at all that APR exists. The APR also means annual costs in percent, and tells how much a payday loan will cost extra on an annual basis. The good thing about ÅOP is that all fees and interest are included, and therefore the term covers all costs of the payday loan. It is mandatory for the payday loan providers to inform their customers about the APR.


Maturity of the payday loan

The maturity of a single payday loan is a term for how long it will take you to repay the quick payday loan. When you take out a quick payday loan, you will usually be able to choose the maturity yourself, and then the interest rate and the APR will be adjusted after the maturity. The same will be the monthly benefit. It will be lower the longer the maturity.


Borrowing rate

Borrowing rate

When you compare quick payday loans, the interest rate will usually be as a borrowing rate. It is the actual interest rate that you pay when you take a quick payday loan. The borrowing rate for quick payday loans is typically between 9 and 26 percent. The reason why there may be an interval is because the actual interest rate is first disclosed when you have gone through a credit rating. The better the credit rating the lower the interest rate will also be on the payday loan. When talking about debt interest rates, interest rates are not included.


Credit costs

Credit costs are important to look at before you need to record a quick payday loan. Credit costs in many ways are reminiscent of the APR, as we reviewed earlier in the article. Instead of stating the cost of the payday loan in percent, they are here stated in kroner. For some it may be a little easier to understand, and it is also nice to know exactly what to pay in addition to the borrowed amount. Credit costs may fluctuate slightly depending on the interest rate you have to pay. In the case of a quick payday loan with a fixed interest rate throughout the payday loan period, it will not change. On the other hand, it will have a variable interest rate.

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