Cash Relief Announces Lower Interest Rate for Payday Loans in New Zealand
Everyone knows that payday loans usually have very high interest rates. Well, not anymore at Cash Relief!
In the middle of June 2018, Cash Relief reduced their interest charge to a new low rate, making them the lowest in the short-term loan sector. See the new rate here
For the borrower, this means cheaper loans and even more significantly, the amount of debt won’t become unmanageable if a few payments are missed.
At the same time, Cash Relief modified their establishment fees to ensure the cost of setting up a loan was adequately covered. While the establishment fee increased, it is discounted for loans under $400 so it doesn’t become a large portion of the amount to be paid back.
Overall, the net result of both the interest and fee changes means most Cash Relief customers will notice a significant reduction in the cost of a loan, thus saving a lot of money which can be spent on other things
Why did Cash Relief make this change?
Usually companies put their prices up, not down? There are several reasons for the Cash Relief interest rate reduction. Firstly, there was scope to move the interest rate down and thus make the payments on a fast cash loan more manageable for the borrower.
A second reason is the world-wide trend to regulate interest rates is about to happen in New Zealand. The government is in the process of reviewing the current regulations with an aim to provide more consumer protection. See the MBIE website. This could well involve capping interest rates, in similar manner to other countries.
One of the best things about a lower interest rate is there is much less impact on borrowers who get behind in their payments. With high interest rate loans, the interest amount to be paid by the borrower can quickly make the debt much larger than originally agreed if payments are not made on time.
In such cases, the amount owing can escalate to be more than the twice the cash advanced. However, when interest rates are lower than 50% per year, the amount of debt does not increase disproportionally to the loan size when payments fall into arrears. This is all good news for the borrower.
Still, borrowers should always take care when thinking about a loan. A rule of thumb is to only borrow the amount needed and to keep this as low as possible. Doing this will definitely help keep debt under control.
See how to get a fast cash loan from Cash Relief.