Where is the high loan cost of microfinance companies?

Small loan companies play an important role in solving the financial difficulties of individuals and small and medium-sized enterprises. Their business is mainly unsecured loans, the loan threshold is lower than that of banks, and the interest is higher than that of banks. However, the loan cost of small loan companies is far more than high interest, and the actual cost may be much higher than your imagination. Where is the specific cost of microfinance companies high? I believe many people will have such questions, so Bian Xiao will tell you that its high cost is mainly reflected in the following three aspects. 1. Handling fee/management fee Excluding the loan interest, many loan companies will charge a handling fee (some companies charge it in the name of management fee) according to a certain proportion of the loan amount. For example, a small business once borrowed money from two loan companies, and both of them were charged a 2% handling fee. The loan was 6,543,800+0,000, but actually it was only 980,000. 2. The loan interest rate announced by repeated interest-bearing microfinance companies is generally around 1.7-2.4% per month, and the loan contract interest rate is generally controlled within 4 times of the bank interest rate (the latest benchmark annual interest rate of the bank 1 year loan is 6%). 3. Liquidated damages for prepayment Small loan companies generally do not encourage borrowers to prepay. If they repay in advance, they will have to pay a penalty ranging from 3% to 4%.