When taking out payday loans are exposed to various fees. First of all, we associate payday loans with interest rates, but we should remember that these are not all the costs that we will have to cover. One of these fees is the preparation fee. What exactly is it and how much it can take?
To get a payday loan, we must apply. However, even the application does not guarantee that we will receive money. We must also meet the bank’s requirements in terms of our creditworthiness and credibility. Free payday loans do exist, but we must remember that most of them are associated with paying specific fees.
The fees associated with a payday loan include:
• interest rate
• preparation fees
• payment for processing the application
• and other fees, for example related to verification
Let’s focus here on one of them, namely the preparation fees. As the name suggests, we are dealing with fees incurred in connection with the preparation of a payday loan.
It is worth pointing out that these are fees incurred only when we already receive a payday loan. When a payday loan institution wants us to deposit money in the beginning to process a payday loan application or prepare a payday loan, let us resign from the offer – it’s usually cheating.
What is included in the preparation fee?
Banks and other institutions mean different costs under the terms of the preparation fee. Most often these are costs related to the preparation of a payday loan – payment of money, transferring it to the client, costs related to checking the customer. Banks and non-bank institutions do not generally indicate what is included in this fee.
We should also not equate the preparation fee with a commission. These are two different fees. In the case of commission, we pay for the payday loan, while the preparation fee has a different task. The commission may also be refunded when we give up the payday loan in accordance with the provisions of the contract. The preparation fee in such a situation is not returned to the client.
How much does the preparation fee cost?
This type of payment can be quite high – up to 1/4 or 1/3 of the payday loan. This applies mainly to non-bank payday loans, as not all banks apply preparation fees.
To find out how much this type of charge will cost us, we should check this in the company’s payday loan calculator. We can do it very easily via the internet when we want to take a break or an on-line payday loan . Then we choose the appropriate payday loan period and amount, and then we can see what fees are included in the payday loan.
Can you avoid the preparation fee?
Basically, this is not possible. It is a fee that is included in all payday loan fees and is also one of the sources of income for payday loan companies. Therefore, we will not be able to receive a payday loan that omits certain fees.
That is why it is worth spending more time to get acquainted with the various offers of payday loan companies and choose the one that will be the most advantageous for us in terms of price.