APRC in the assessment of payday loans

Chwilówki are short-term loans serviced mainly via the Internet due to the reduction of customer service costs. One of the most important indicators when analyzing payday loans is APRC, i.e. the actual annual interest rate. Does the APRC really facilitate the decision to support the budget with payday loans?

APRC as an indicator imposed by law


The APRC indicator appears for all short and long-term loan offers. These top-down guidelines are directly related to the European Union’s recommendations. According to theoretical assumptions, the APRC includes literally all costs of liability, which allows for instant comparison of payday loans offers. But is this really the case?

What does the APRC indicator consist of?


The APRC ultimately consists of preparation fees, commissions, naturally interest, other fees and services provided by non-bank institutions or retail banks. In accordance with current legal standards for granting loans, parabanks cannot impose unusual, typically usury fees on clients.

Some parabanks promote payday loans with an APRC of 0%. However, the borrower must always pay the liability in a timely manner to avoid additional costs. Any delay can result in breaking similar conditions.

Additional conditions for proper comparison of payday loans


There are several additional factors to consider when analyzing the APRC. The first of these is the loan period. You always compare payday loans with the same repayment period and then the APRC value matches the reality.

In some calculators, comparison websites, periods are changed, they vary depending on the marketing of non-banking institutions. Another APRC cannot be excluded with decreasing or fixed installments, but this does not occur with payday loans.

However, if for some reason you make a mistake and the cost of the loan is greater than you expected, you can terminate the contract within two weeks of signing. Regardless of whether you are dealing with short-term payday loans or long-term mortgage.