The Anti-usury Act, which has been in force since March 11, 2016, has limited not only the maximum interest accrued on the borrowed amount of money, but also the total non-interest payroll costs.

## Payday loan online

The cost of the product, which is payday loans online, usually includes the amount of commission and insurance of the loan, which in the period before the new regulations came into force could generate a repayment amount that significantly exceeds the base amount of the sum borrowed. In this way, dishonest loan companies took advantage of the ignorance and unawareness of customers who took out seemingly attractive interest rates, but the total sum of costs meant that this product finally became horrendously expensive.

At present, the maximum interest rate related to the payday loan must be within 4 times the lombard interest rate of the National Bank of Poland, which is currently 2.5%. Thus, the maximum interest rate on a non-bank loan may be 10% per annum. These statutory solutions primarily limit the amount of non-interest loan costs and they may exceed the value of 25% of the sum borrowed plus 30%, but on an annual basis. What are the maximum costs of the payday loan over the internet based on the example of a PLN 1,000 contract for 30 days? The maximum interest rate will be PLN 8.22 and the total non-interest cost will be PLN 274.66. In total, we will have 1282.88 PLN for each one thousand zlotys borrowed to be repaid after a period of one month. Keep in mind that these are theoretical calculations assuming that the loan company grants an express loan at the maximum possible cost.

## Is payday payday loan expensive?

Not necessarily, and in addition in the offer of most loan companies we will even find proposals to take a free first payday loan online, whose interest will be real PLN 0. Non-bank institutions that grant payday loans online also have a legal obligation to provide the actual annual interest rate (so-called APRC payday loans). Although this ratio has little to do with real interest rate on the loan, and its value can reach abstract values, especially in the case of short-term payday loans, it makes it easier to compare and choose the best loan offer. The APRC ratio will only be useful if we combine the offers of competing loan companies with the same parameters, i.e. we will compare payday loans in the same amount for the same repayment period. Then the lower APRC value will show us a financially more favorable quick payday offer.