Bad Credit Loans Loan In Canada Explanation Of Bad Credit Payday Loans Part Fifty Eight

Lenders of bad credit payday loans will always charge interest on the money that they give to the borrower up front

. This they do by adding a loan fee to the initial loan amount requested by the borrower. This loan fee is usually a flat percentage of the principal loan amount lent to the borrower. As an example, a borrower requests a loan of two hundred dollars. The loan fee that the lender might place on this two hundred dollar loan would probably be twenty dollars. After the borrower pays back the total loan amount of two hundred and twenty dollars at the end of the two week loan period, as agreed and contracted, the rate is then annualised to give an Annual Percentage Rate (APR) for the loan of five hundred and twenty percent. This is the controversial interest rate that all the critics of bad credit payday loans are complaining about as they believe that it is abnormally high and unaffordable.

The method used to calculate the Annual Percentage Rate (APR) of bad credit payday loans, using the example detailed above, would be to multiply the loan fee payment of twenty dollars by the number of payment periods in a year, which would be twenty six payment periods because there are twenty six two weekly payment periods in a year. The total achieved must then be divided by the total amount of the initial loan, without the loan fees, which is two hundred dollars. So the calculation would be as follows. Twenty multiplied by twenty six equals five hundred and twenty, followed by five hundred and twenty divided by two hundred which equals five point two. This five point two is expressed as a percentage of the initial sum which works out at five hundred and twenty percent. This is obviously an abnormally high interest rate that nobody can or will want to afford to pay back to any type of lender.

People who have no money and are suddenly hit by an unexpected financial emergency need to apply for bad credit payday loans, as this is the reason that they were created. People should not use bad credit payday loans to pay for their regular and consistent monthly debt and expense payments. This will be committing financial suicide if they do. Obviously, common sense needs to prevail, where the borrower must be absolutely certain that they can pay back the bad credit payday loan at the end of the mandatory two week loan period. This final loan payment obviously also includes the loan fees that the lender has added on to the loan. If people cannot pay back the loan at the end of the month, when they get paid by their employees, then they need to look elsewhere to get the money. Other alternatives could be to ask family and friends for the cash amount, as in most cases it is usually a small amount of money ranging from one hundred dollars to one thousand dollars.

To read about the various types of Canada loans available at BHM Financial or to apply directly online for a Canada loan in any one of the Canadian provinces namely, Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan, visit the loans in Canada website at bhmfinancial.com. You can also text chat with a BHM Financial loans consultant now, online, about your Canada loan, by accessing this link Canada bad credit loans text chat.

To learn more about the different kinds of Canada loans offered by BHM Financial visit Bad Credit Loans Loan In Canada Explanation Of Bad Credit Payday Loans Part Fifty Seven.

Bad Credit Loans Loan In Canada Explanation Of Bad Credit Payday Loans Part Fifty Eight

By: Clyde Thorburn

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