An Overview Of Payday Loans
If you live in the UK, then you have certainly heard of payday loans UK
. There are numerous TV adverts from a number of payday lenders; there have also been, however, a number of stories in the press that have, shall we say, not cast them in the best light. The media, as ever, has looked only at the cases in which the loans have not worked, and ignored the hundreds and thousands of times that they do. Sure, some people will run into trouble, but as long as you understand the loans, you can make them work for you, and ensure that you run into none of the problems portrayed in the media.
Here, we will attempt to dismiss some of the bad press, by explaining exactly what a payday loan is, how it works, and the reasons why people get into trouble and how to avoid it.
Payday Loans UK: What Are They
Unlike a loan that you would borrow from a high street bank, which usually have a minimum 12 month term, payday loans have a maximum term of 1 month. This has several benefits for people who take out the loan:
1. It means that the loan is paid of quickly; this reduces the amount of time that it hangs over them, as a drain on the household budget.
2. It means that borrowers can take out smaller loans that they can with the mainstream bank (payday loans start from as little as 75, whereas the main banks start at around 500).
Payday loans are intendedas the name suggeststo help tide people over until their next payday. For example, they are ideal for those times when you get an unexpected bill, such as a vet bill, dental bill, or a car repair bill. They are designed to help people to make ends meet, when, for one reason or another, their money simply doesnt stretch far enough in a particular month.
Why Choose a Payday Loan, Rather than a Bank Loan?
Aside from the two points listed above, there are other reasons why a payday loan may be more suitable than a standard bank loan.
It is much easier to obtain a payday loan than a standard loan. There are several reasons for this, but basically, the lenders take less of a risk (short term lending of small amounts is relatively low risk). This means that borrowers do not need as good a credit score as they would for a more substantial, longer, term.
It takes a lot less time to obtain a
payday loans uk 24/7 than a standard loan. The application takes a matter of minutes, and can be completed onlineno need to go into branch. You will find out almost immediately whether or not you have been eligible for the loan.
The only problem that people may encounter when taking out a payday loan is the interest accrued if the loan is not repaid on time. For this reason, we recommend that you accept a loan only if you know that you can meet the repayment terms.
by: stevenmartin
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