We often hear bad things about payday lenders, but we hardly ever hear the positives about them. They actually can be very useful for some people who have used them to their advantage. It can be worth learning more about their good points before you decide what to do with regards to borrowing money. It is not good to discount options until you know a lot more about them first.
Representative Example: £400 borrowed for 90 days. Total amount repayable is £561.92 in 3 monthly instalments of £187.31. Interest charged is £161.92, interest rate 161.9% (variable). Representative 305.9% APR. We are a broker not a lender. We don't charge fees. We don't sell your personal information.
Payday loans are really short term. In many cases the loans only last for a few weeks as they are designed to just keep you going until your next pay day. This means that you do not have a stressful loan hanging over you for a long time. Some people find borrowing more stressful than others but if a loan goes on a long time, then chances are that it will be more stressful. You will also only have to find one repayment, which could be easier for you than having to find a series of repayments.
If you do not have a good credit record then borrowing can be really difficult. It can mean that you will be turned down for loans or that you will be offered then at very high rates compared to borrowers with better credit ratings. This means that if you need money then getting hold of it can be hard work and expensive, if not impossible. Payday lenders will not do a credit check and so it does not matter to them if you have a poor credit record or not. They will lend to you anyway. This means that they could be a useful option for you.
Some forms of lending, such as credit cards and store cards, only encourage you to repay a very small amount of money which just covers the interest and nothing more or just a little more. This means that the loan can potentially last forever unless the borrower decides to pay it off. With a payday loan, you have to pay it back and normally within a few weeks. This can have many advantages such as being cheaper and getting rid of the burden of a loan more quickly.
Payday loans can be arranged really quickly. Some lenders will let you have money within a few hours and others will take a few days. These are a lot quicker than most conventional lenders and so if you need money really quickly, they could be useful for you. The only loans that would be quicker would be if you used a credit card or overdraft that you had already arranged.
Payday loans tend to be for £1000 or less. This means that the loans are relatively small compared to many other types of lending. They are therefore more manageable and easier to repay. It can also be tempting to borrow more than you need if you are offered a lot of money, but if they only lend a small amount then you cannot take more, which means that it could be possible for you to save money with a payday loan.
So despite everything that you may have heard, you will see that there are a lot of good things to consider when you are looking at whether to take out a payday loan. Obviously you will need to check the cost, repayment term and other conditions of the loan to see whether it suits you. There are lots of lenders so you can compare them to see which you think will be the best for you. However, if you do only need a small amount of money a payday loan could be an easier, cheaper and quicker option compared with some other types of lending. Therefore take a look at what is available and the rates and compare that with your other options and you could find that it will be a good one for you. It is sensible therefore, taking some time to explore all of the possible options available to you as you could be surprised as to which ones will benefit you the most.