Getting The Best From A Payday Loan
Many people are choosing a payday loan as a way of dealing with unexpected expenses. This can be an easy way of getting cash quickly.
A payday loan effectively gives borrowers a cash advance against the money they expect to earn in the next pay period. All they have to do is pay it back (with a fee added on) and they can get back to managing their money normally.
The premise is simple. Borrowers who are over 18, UK residents and who have been employed for about three months can qualify for a payday loan. All they have to show is some identity and proof that their salary has been paid into their bank account. The amount borrowers earn will determine how much they are able to borrow. This can be anywhere from £50 to almost £1,000.
Payday loans are popular because the approval process is much quicker than with other loans. Once the application has been checked, money can be paid to the borrower within 24 hours. no hard credit checks are required, so even people who get refused will not damage their credit rating. And best of all, a poor credit rating is no barrier to getting a payday loan. All lenders care about is that borrowers can repay the amount borrowed and the fee that has been set.
What Does A Payday Loan Cost?
Payday loans charge either a percentage of the amount borrowed or a fixed rate as a fee. This is all that borrowers pay if they repay on time. Using a payday loan might be a good option for those who need a one-off short term loan. However, if people are unable to repay when payday comes around, they may be able to rollover the loan for another pay period. However, another loan fee will be added to the balance to be repaid. This must be repaid before the borrower can have another loan with the company.
- The Inside Track On Payday Loans
Not everyone needs a full fledged loan. Some people just need a bit of cash to tide them over till the next pay cheque. And there's now a way for them to get it. It's called a payday loan.
If the borrower defaults, loan companies will get debt collectors involved. This could seriously affect borrowers' credit rating and financial health. While the fees on payday loans seem acceptable within a short period, the annual percentage rate can be several times the highest credit card APRs. Some people estimate that payday loans have an APR of more than 300%.
Who Can Give A Payday Loan?
There are hundreds of payday loan companies in the UK and thousands worldwide. Some of these are big lenders with other financial products. Others are smaller lenders operating from small high street shops or trading on the internet. So it is easy to find a payday loan company. To find the best one, consider checking the Office of Fair Trading to see if there have been complaints about specific companies.
The best choice for a payday loan company will be one that has clear information about fees and interest rates, and that has clear contact information. A company that hides this information may not be the best choice for a payday loan. It's worth checking how long the company has been in business. Borrowers should also make sure that there is no additional service or application fee, as this could make the payday loan even more costly.
If borrowers find that they move from payday loan to payday loan, it may be worth considering another form of finance. Payday loans can be very expensive over long periods.