You might already be aware of what a payday loan is, but if you’re not, a payday loan is essentially a short-term, high-interest loan to bridge the gap between paydays if you find yourself short of money.
The average cost of quick payday loans in the UK can be up to £25 for every £100 borrowed per month. If you decide to take out a £500 payday loan, you’ll need to pay back an additional £125 to your overall fee just for borrowing it.
Anyone can take out a quick payday loan providing they have a steady form of income. This includes people that rent a property, earn less than £30,000 a year or are separated or divorced.
Payday cash loans are great for those who can pay them back on time – but can cause more damage than good for those who can’t. Payday loans are available aged 18+ with a checking out and reliable form of income. Most people spend their payday loans to pay for an unexpected payment such as buying something they find necessary to have. People are sucked into the hassle-free process of getting cash fast. Even if you have a bad credit history, you may still be eligible for the loan when you apply for a bad credit payday loan and could get your loan deposited into your check account within 3 days.
The fast and convenient service is easier than completing paperwork that come with traditional loans. When there are no other options available to you, payday loans are highly convenient. If you find yourself in the middle of a dangerous financial situation and you have no other solution but to take out a payday loan, a payday loan could be the best option for you.
Despite the ease of taking out a payday loan, they are usually more expensive than other loans on the market. Before you make any immediate decision, consider than you might have to pay interest of up to 900% compared to the average 12% APR on a credit card. You’re expected to pay more because of the big fees associated with payday loans and the difficulties some people face getting out of them. If you fail to repay your loan under the terms and conditions of your payday loan, you may face an increased interest rate than will continue to rise.
It’s easy to fall into the trap. A vast amount of the return made the payday loan businesses are received by customers who are unable to repay previous loans on their due date and have no other choice but to extend their loans again and again until they are able to which can lead to extreme debt.
Similarly, lenders can sometimes be misleading in the information they decide to disclose to a potential customer. If you see an advert for a payday loan that could be misleading, you should take immediate action to get it taken down by contacting the Advertising Standards Authority. Otherwise known as the ASA, the Advertising Standards Authority has the power to remove adverts that ignore the rules.
Not all payday loans end badly. Make sure you look before you loan and are able to pay it back otherwise you might find yourself being bombarded by your lender chasing your missed payment.