# To Payday Loan For A Car or Not?



## izwilder (Jun 7, 2016)

I'm at my first job and my wages are coming in fortnightly. I'm at my 5th month and the vehicle I've long wanted is at half price. Would it be wise to take out a payday loan to purchase it or not? Your advice is much appreciated. Thank you!


----------



## chicken999 (May 2, 2013)

No! They are a ripoff and too many fees and high interest. Either save up r apply at ur bank for a personal loan or even a credit card - u can get a cash advance on credit card - I did that once to buy a car interest was still high but I paid it off quickly

Sent from my iPad using Australia


----------



## JandE (Jul 17, 2015)

Payday loans, or cash advances, are usually less than $2000, typically several hundred dollars, and charge very high rates of interest - sometimes equal to 300 per cent when calculated on an annualised rate.

Normal bank 'car loan' rates are nearer 10% to 20%.

News Article on Payday lenders: 'They're no different to drug dealers'


----------



## izwilder (Jun 7, 2016)

chicken999 said:


> No! They are a ripoff and too many fees and high interest. Either save up r apply at ur bank for a personal loan or even a credit card - u can get a cash advance on credit card - I did that once to buy a car interest was still high but I paid it off quickly
> 
> Sent from my iPad using Australia


How much was the interest?


----------



## JandE (Jul 17, 2015)

About 20% per year is a common rate for credit cards with no annual fee, but you can get down to around 14% with an annual fee of about $60.


----------



## izwilder (Jun 7, 2016)

JandE said:


> About 20% per year is a common rate for credit cards with no annual fee, but you can get down to around 14% with an annual fee of about $60.


What is an annual fee? I've got to apologize for not knowing what it is. I'm a greenhorn when it comes to these matters.


----------



## JandE (Jul 17, 2015)

izwilder said:


> What is an annual fee? I've got to apologize for not knowing what it is. I'm a greenhorn when it comes to these matters.


Some credit cards are free to get, but some others have an annual charge whether you use it or not.
The interest rates on those with a fee are often lower.


----------



## izwilder (Jun 7, 2016)

JandE said:


> Some credit cards are free to get, but some others have an annual charge whether you use it or not.
> The interest rates on those with a fee are often lower.


What would you recommend in regards with the card?


----------

