With many products you’ll often be able to find them cheaper if you decide to shop online rather than you would if you were to purchase on the high street. However, when it comes to financial services, such as credit cards, bank accounts and loans, this isn’t always the case. So are you better off visiting a real store or applying for your payday loan online?

Theoretically, the rates should be reasonably similar. Whilst there will always be fluctuations between different lenders and the rates they charge, you should largely expect to pay between 20% and 30% interest on a payday loan. The real difference comes when comparing the various charges, whether interest is applied daily or at a standard rate and indeed how long it will take to get the money transferred to your account.

It’s important that you take a look beyond the advertised Representative APR. Whilst this is a good guide, it won’t necessarily provide an accurate insight into the actual cost of a loan. Payday loans are a completely different entity to personal loans, credit cards and other forms of finance which feature rates of interest that are shown in the form of APR.

If you were to apply for a credit card you could reasonably expect to see an APR of between 0% and 25%. This means that over the course of the year your total interest will amount to whatever the advertised figure is (depending on any changes to your credit agreement). But this won’t usually be charged in one go after 12 months has elapsed, instead it will be reduced to a monthly level.

As such, if you were to have a credit card that was advertised with an APR of 12%, you would actually end up paying interest on your outstanding debt at a rate of 1% per month. So it’s always reasonably easy to calculate what the interest will be, look at the APR and divide by 12. The same can’t be said for payday loans though.

These aren’t repaid over 12 months, in fact most will be completed within a month. As such the APR is noticeably higher than you would expect to see on personal loans; in fact it can even reach in excess of 4000% with certain companies. This doesn’t mean that you have to cough up 40 times the original amount borrowed though, actually far from it.

Because it is a short term loan, numbers can be easily skewed, which is why it is important for you to find out the actual cost of borrowing before committing to any form of payday loan. If you were to visit a store, you can discuss this with their sales team who should be able to provide you with an accurate quote on how much you would need to repay. The same is true online though, with most websites providing some form of tool to help you calculate interest and other associated charges, it’s easy to compare the various providers quickly and easily.

This is possibly one of the biggest advantages of using the Internet rather than visiting a shop for a payday loan: choice. You won’t have any external pressure applied to you either as you go through a number of sites or brokers to find out the real cost of borrowing. It may well end up being cheaper to use an offline company, but without carrying out comprehensive checks online first, you will never know what rates are available.

A great deal will ultimately come down to personal preference though. Some people prefer the instantaneous nature of the Internet, which allows you to apply at any time and from any location without any external pressures too. However, others will always prefer face-to-face consultations and knowing exactly who they’re dealing with. So whilst the APRs will often be similar, the service certainly won’t be.

Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends Paydaypower.co.uk

Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends http://www.paydaypower.co.uk

Author Bio: Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends Paydaypower.co.uk

Category: Finances
Keywords: Payday Loans, Payday, Loan, Loans, Short Term Loans, Finance, UK