Alabama consumers considering payday loans as a way to pay off urgent expenses may have heard some myths about these short-term loans. The biggest myth is that Alabama payday loans come with a massive interest rate. Those who are opposed to payday loans cite the APR -- or annual percentage rate -- as a reason for consumers to avoid these loans. But the critics are not providing all the information to consumers.
The truth is, Alabama payday loan come with a high APR when you compare the ARP of other types of loans. However, what is not mentioned is that these are short-term loans that are usually repaid within a couple weeks. The fees on an Alabama payday loan are really very reasonable -- usually about $15 for every $100 loan. (The fees vary by lender.)
Critics like to paint a picture of payday loans online going unpaid for an entire year and accruing a huge amount of interest. But, the fact is that even if the loan is extended beyond the two-week repayment time frame, there are limits to the number of times the loan may be rolled over. Alabama payday loans are never rolled over for an entire year; and therefore the APR is never fully realized.
We hope this helps Alabama residents to better understand the truth behind the biggest myth about payday loans.