Is There A Way To Negotiate A Lower Fee/Interest Rate On Payday Loans?


Payday loans are short-term convenience loans that let people get money fast to pay for emergencies such as auto repairs or medical expenses. Lenders do charge a fee for the money (e.g. $15 per $100 borrowed), which can put the interest rate for these loans anywhere between 391% and 521% per year. As a borrower, you may be wondering if there is any way to negotiate a lower fee or interest rate on the loans you take out—something that can help you pay off the debt faster. Payday loan lenders tend to be pretty firm about the money they charge. However, there a few ways you may be able to score a decreased rate on your cash advance.

Belong to a Special Organization

One way to get a payday loan company to charge you a lower rate is to belong to an agency or organization that has either negotiated a lower rate with the loan company or which state and/or federal law has restricted the amount of interest cash advance companies can charge that particular group.

An example of this type of special treatment is the US military. The federal government passed a law that limits the rate payday loan companies can charge military service members to 36 percent per year. This percentage rate must include all fees or surcharges assessed. Typically, you'll have to show your military identification or other proof you're an active service member to obtain the discount.

Sometimes a payday loan company will negotiate a lower interest rate with a specific organization in a particular area in exchange for referrals. It's best to contact different cash advance companies to see if they have deals for members of organizations you're a member of.

Customer Loyalty Programs

You may also be able to get a lower rate by taking advantage of the payday loan company's customer loyalty program. These programs are run in a couple of different ways. One way is the company will give you a discount after you take out a certain number of loans (e.g. 10 percent discount off fee after 5 successful loans).

Other companies assign points to each transaction a customer conducts, which the customer can redeem for discounts off fees or other rewards at a later date. For instance, you may earn points for taking out loans, buying money orders, and cashing paychecks at the facility.

Since the average person who uses payday loans has about nine loan transactions per year, signing up for a company's loyalty program can help you save quite a bit of money over the life of your loans.

Discounts for Referrals

Payday loan companies are always on the lookout for new customers. As such, many of them have referral programs where they give existing clients rewards for each person they refer to the company. Most of the time, the reward is cash. For instance, the company will pay the client $25 per referral. However, other companies will give the customer a discount off the fees on their loans for each person who takes out a loan with the business.

If you know quite a few people who seem to constantly need money, it may be a good idea to talk to research whether or not a company has a referral program. Helping your friends and family members get cash when they need it may help you earn a lower rate on your loans.

A noted previously, finding ways to reduce the interest rate or fee you're charged can help you pay off the payday loan faster, so take advantage of all the options available to you. For more information about payday loan rates, connect with online payday advance resources.


25 August 2015

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