Very few people would call loans "simple" and "easy to understand". For most people, the loan process is scary and complicated. Loans, by their very nature, are a bit complex and because of the financial commitment involved, they have an air of "seriousness" surrounding them.
It's especially important that you understand everything when we're talking about interest and cost of your loan. You must be able to afford the monthly repayments for the entire duration of your loan, and you also need to have enough money left over for bills, expenses and living costs. Our loans should never put your personal finances under too much pressure for you to handle, and to avoid that, we have to be open and explain all costs involved.
A good place to start: how much will you pay back? You've probably heard of compound interest, early settlement fees and payment reminder fees? We don't believe in those.They're confusing, expensive and often not explained in a way that makes sense. We don't think that's fair or honest. If you don't understand how much it will cost you, how could you possibly know if it's something you can afford?
Our loans are simple, they make sense and we'll only ever ask you to honour the original agreement we've signed. You'll know from the start what your monthly repayments will look like and what you'll repay in total.
We think everything gets easier with lots of examples, so we've got some below:
If you borrow:
Over a period of:
So your monthly installment will be $129.23 per month and you'll pay $4652.28 back in total. This means it will cost you a total of $1652.28 to borrow $3000 from us over 36 months.
But the loan could be cheaper if you pay it back quicker than the 36 months. We don't charge anything for early repayment of the loan and we calculate the interest rate on a daily basis. That means you'll only pay for the time you have the loan. Although you've signed an agreement that says you have to pay $4,652.28 back, it will be significantly cheaper than that if you pay back in just 12 months, as an example. We think that's fair.
It's important to compare the costs of different loans. Shopping around is vital, so that you don't end up paying more than you have to for a loan. Normally loans are compared using APR (Annual Percentage Rate), which essentially tells you the yearly cost of a loan.