It can all seem a little confusing if you do not understand the purpose of each of the figures and learn how to compare between them.

 The Purpose of APR

 The APR (annual percentage rate) consists of interest rates and fees due for a period of a year for the loan amount. In an attempt to teach consumers about the long term cost of loans and in order to provide a simple way to compare between the different lenders' fees, the US government requires that the APR is posted.

This helps in researching rates. All you need to do is look for the lowest percent. If you cannot seem to locate the rate on a lender's site, be sure to ask for it before applying. If the lender still does not provide you with an answer, skip the lender and find a different one.

Nevertheless, while an APR assists you in comparing cash advance companies; it does not tell you the actual cost of the loan. The majority of consumers only take a cash advance loan until the next payday, often less than 17 days. So in order to understand your loan's cost, it is important to look for both rates and fees.

Cash Advance Fees and Interest Rates

Interest rates and fees are usually stated up front by the different cash advance companies. Sometimes there is also an application or processing fee, similar to any other typical loan.

 To determine the actual percent of the fees, divide the total amount you need to pay on your next payday by the fee, which also includes interest. For instance, the cost of a $200 loan might by $40 dollars. By dividing 40 by 200 (40/200) you get 0.20, which is 20% which is the actual percent of the fees.

Fees Out Of Hand

Your fees can easily get out of hand if you fail to pay back your cash advance on your next payday. On top of your interest rate charges, you will also have to pay late fees. If you think you need money for a longer period, it is probably wiser to use a credit card or other any other type of credit.

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