CashNet USA

There are mysteries in the universe the human mind cannot comprehend or grasp at once and one is the APR in payday loans. What is the significance of this bit of puzzle in high finance?

The APR

Someone intelligent came up with the APR to protect consumers from devious lenders. You can compare the APR or Annual Percentage Rate to the list of ingredients in a jar of pickles. From that list of ingredients, you know what you are going to get, loads of sodium and water and fresh pickles. With an APR in payday loans, you know how much you are paying for a loan in the course of a year. That includes the interests, charges and other mysterious fees.

The payday loans in most states are not regulated and the loan providers are allowed to charge any fee and annual percentage rate that the borrowers are willing to pay. However, this microloan market is in essence regulated by the competition amongst the various lenders, which strive to offer terms that are more favorable in order attract more customers. The statistics show that the average amount borrowed is typically between $100 and $500 and the money is generally borrowed for one to two weeks.