Payday loans have the highest interest rates out of different payment methods.


Different payment methods have different benefits, but the downside of many of them if the interest rates charged for their usage. Trying to decide, what is not a common credit card fee, card users attempt to avoid extra charges, but typically payday loans’ interest rates are the highest among different payment methods. Compared to credit cards with an average interest of 15%-30% or the personal loans with 14%-35%, the income loans average interest rate can reach 391%, according to the InCharge Debt Solution website. These data leave no doubts about which payment method typically charges the highest interest rates.

Payday loans can seem a quick solution to a sudden decrease in income. Nonetheless, they are not the best option for people asking a question, which payment method is best if you are trying to stick to a budget. One of the reasons why people still choose payday loans is the short time it takes to get a loan. Only a registration form, personal identification document, the person’s bank account number, and the most recent pay stub are required to take a loan. Payday loans vary on the amounts and can be given to the person on the spot.

However, the interest rates of the payday loans are calculated by adding 15%-20% to every $100, which is borrowed. If a customer cannot pay on time, which is in two weeks after taking the loan, extra charges apply to the amount. Therefore, most payment methods have interest rates charged for using a certain tool, but looking into the amounts of those rates for alternative methods like credit cards, pre-paid cards, or cashier checks, payday loans charge the most.