The Consumer Credit Legislation Amendment Act of 2012 was intended to curtail the worst abuses of the payday loan industry. Australia banned payday loans of more than two thousand dollars that must be repaid in 15 days or less. It set the maximum establishment fee at 20 percent. It set a maximum monthly fee of 4 percent on the credit amount.
Penalties on unpaid loans couldn’t be more than twice the loan amount. Yet these fees can still add up. Let’s learn how to avoid unnecessary fees on cash loans.
Do Your Research
Don’t apply with the first lender that pops up in an online search. Compare loan terms. This includes comparing annual percentage rates, loan origination fees and monthly fees. A good loan choice is one with the lowest possible overall borrowing costs, not necessarily the one with the lowest interest rate.
A site like Gdayloans allows you to compare the loan terms for more than a dozen lenders. It even lets you calculate the estimated monthly payments for each lender and various potential loan terms. Then you can choose a loan that you can afford to repay.
Know the Rules
Payday loans won’t involve a hard credit inquiry. They shouldn’t ask you to wire them money or send them a gift card in exchange for cash. However, you’re going to be charged interest and fees. Know the rules before you commit and abide by them once you’re in the contractual relationship. For example, you might be hit with a prepayment penalty if you pay the loan off early.
If you plan on paying off the loan with your next paycheck, don’t take out a short-term loan that has a prepayment penalty. If you may not have enough money to make the 500-dollar payment, choose a longer loan term or lower loan amount rather than paying an additional fee to refinance the loan.
Create a Plan to Repay It as Soon as You’re Approved
One way to prevent unnecessary fees on cash loans is to start planning how you’ll repay it as soon as you have the money. You might want to plan to work overtime, sell things or make other arrangements so that you’ll have the money to make the necessary loan payments. You’ll minimize the fees and interest if you can pay it off. If you’re going to make the payments out of your regular income, get on a budget so that you don’t find yourself without the necessary cash when the bill comes due.
Be Ready when the Payment Hits
There are several variations of this advice. Wait until the cash had deposited in your bank account before you start making bill payments. Ensure that there is enough money in the bank account to pay the weekly or monthly payment before they draw on the account. Consider having some margin in the account. Then you can’t be hit with bounced check fees or late fees because a late fee on another transaction caused the account to have insufficient funds for the loan payment.