Payday Loans – Are They Worth It?

Payday loans are a relatively new form of lending, which have grown to be hugely popular in a very short space of time. They are designed to ease the gap between paydays – and as a short term option they can work very well.

The important thing to consider with payday loans are they are designed to be for a very short period of time – usually less than 30 days but sometimes up to 45 days. In the UK, all loans are required to have their APR – annual percentage rate of interest published with them, and because these are calculated using an annual rate, the APR on payday loans can seem very high. Although It is true that payday loans are a more expensive form of lending than for example an overdraft, the benefits for most people outweigh the costs.

One of these benefits is that payday loan companies do not credit check you, so a pay day loan is available to everyone regardless of credit history. A payday loan is basically like an advance on your wages, when your wages are paid, the loan is repaid. The loan company will ask for permission to charge your debit card or bank account on a certain day – ie payday, so they are sure they will get their money back. Therefore your credit history isn’t important.

Secondly, a payday loan can be arranged very quickly – in some cases you can receive the money in as little as two hours making it ideal for emergencies. We all have unforeseen emergencies and payday loans can be very useful in helping with an unexpected car repair bill, or household disaster.

If you are in full time employment, earn over £750 a month and have a debit card or bank account, it is very likely that you qualify for a payday loan making it one of the easier forms of credit to obtain.

Payday loans are ideal if you need a very short term loan – up to 2 months, but if you are looking for longer term borrowing then there are other options which you should probably consider first. If you have very poor credit and need a loan, there are still some options available to you. If you have a newish vehicle (under 10 years old) you may like to take out a logbook loan – a loan secured on your cars documents which can be repaid over a period of up to 24 months. Doorstep loans are a useful option too, and doorstep loan companies are also willing to consider applicants who are unemployed or on benefits. Lastly consider guarantor loans if you need a larger sum of money and can find someone willing to be your guarantor.

To find out more about payday loans, logbook loans and other forms of lending, visit Fast Payday Loans UK