Whilst lenders are usually keen to point out that you won’t be hit with any extra charges on your short-term loan, it’s not always the case.
There are some lenders who charge extra fees, there are lots of providers that don’t charge extra fees for their loans. Most say they have a strict policy against hidden costs, but it’s always worth reading through the details of the agreement to see if you’re in for any nasty surprises. Provided you repay on time, you should only pay interest fees and the borrowed amount itself.
It’s worth keeping an eye out for the fees in your loan agreement. There are many different kinds of charges and you should take them into account when you’re weighing up the good and bad points of different kinds of credit.
• Missed Payment Fee – If you miss a payment date, particularly with payday lenders, you could be asked for around £15. It also gets recorded on your credit file, and could therefore lower your credit rating.
• Transmission Fee – This is a charge for giving you the money, usually if it’s for less than 20 days or so, and is meant to cover the costs of processing an application quickly. These are now less common since new rules were brought in by the Financial Conduct Authority in January 2015, but still check the loan’s terms and conditions just in case.
• Origination Fee – A bit like a transmission charge, this is for setting up the loan – as opposed to processing the actual money side of it.
• Extension Fee – Should you want to put back your final payment date (the day you’d completely clear your loan) you might be charged. It’s possible this could be added to your total loan amount.
• Broker Fees – Brokers offer to help customers find the most suitable loan for them based on individual circumstances and needs and could charge a brokerage fee to do so. These fees could be as much as 10% of the loan value. When looking for loan options online, read the website carefully. Make sure you know what your details will be used for. If the website doesn’t say, then don’t enter them. Lenders who do not use brokers will usually use phrases such as ‘We’re a direct lender’. You can read more about brokers in our guide here.
• Late payment interest – Most lenders will continue to add interest to your loan repayments even if you’re late paying.
At Provident, we’re different. We don’t charge any extra fees, ever, so you’ll always know the full cost of your loan upfront. Whilst we do use brokers, we insist that they do not charge the customer for this extra service, so there are no additional fees when you apply for a loan with us.
What’s more, if you’re late to repay your loan, we won’t add any extra interest charges.