Q:

What is the average interest rate for a one hour payday loan?

A:

Quick Answer

Interest rates for payday loans vary a lot from state to state, but the usual annual interest rate is 391 percent, notes the Federal Trade Commission. Most lenders start with an initial finance charge of about $15 per $100 borrowed and then start charging interest.

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Full Answer

Quick payday loan and 1-hour lenders make small amounts of money available to those strapped for cash for what seems like a modest fee. The loan comes due within 2 weeks and is usually taken right out of the applicant's checking account as stated by the Washington Post. However, when borrowers can't pay and have to roll over their loans an additional fee is added to it. Doing this every 2 weeks for a year adds up to a tremendous interest rate.

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