So many numbers are thrown around when talking about cash advances, also called payday loans, that it can be hard to know what the real cost is. What you actually pay for your payday loan is usually a financing fee rather than an interest rate. APR is used to compare the yearly cost of such a loan, even though payday loans are usually repaid in less than 17 days.

Financing Fees

Most cash advance companies charge finance fees rather than interest in order to get around some state laws. Finance fees are usually charged on a pay period schedule of two weeks, although some companies have a shorter or longer repayment periods.

For a cash advance of $100, you can expect to pay around $15 in finance fees. Some lenders charge more or less, so it pays to compare rates. Online lenders usually post their rates or APR, so you can research lenders in minutes.

If you don’t repay your loan when it is due, you can roll it over. You add on finance fees for the additional time. You have to be careful with this option. If you put off repayment too many times, you can end up owing more in finance fees than principal.

Understanding APR

APR is the yearly rate of the loan, even though cash advances are intended to be short term loans. It is figured the same way as credit cards, multiplying the rate over the year and including any fees. While the APR does not equal your real cost, it is a nice comparison tool.

An APR compares the same number, regardless of lender. If you go online, most cash advance companies will list the APR on their website. You can also request the number from them before you apply.

Comparing Costs

When you are trying to decided whether to get a cash advance or not, you should compare the other costs associated with your decision. For example, will you pay more in late fees or interest charges by missing a payment? Will NSF fees amount to more than a payday loan fee? What will it cost you if the car doesn’t get fixed?

If the finance fee is smaller than other costs, then you are saving yourself money in the long run.
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The Governor of the Bank of Italy, Mario Draghi, has written an article in the Observatory Romano, the Vatican newspaper, repeating the intervention of the Pope concerning their economy in the third encyclical: “to resume the path of development should be create the conditions for the general expectations, what Keynes called long-term return favor. You must restore the confidence of businesses, families, citizens, persons in the ability of stable growth of economies.”

After the financial crash of banks and financial institutions around the world probably has realized that, in addition to the normative rules in order to run the economy and we are all better, it takes a bit of ethics. Finally!

Written laws can always be circumvented, while the moral laws, although not legally valid, allow us to guarantee social welfare.

It is more important to be a nation rich or happy?

Demand in the past if the posts are several economists and eventually follow always the same: money brings happiness?
But as Toto said the money does not bring happiness, let alone the misery.
Here then is that finance has to understand that money is tied to the welfare of society and the individuals who compose it.

Money and morality go hand in hand.

The value of money is a means to improve the happiness of a nation and not just an interest.

Selfishness cannot bring anything but unbridled deep crisis and discontent common.

Now that we are starting to say the first words on this subject, how long will it take to introduce it effectively in the economic system?