We often hear a lot of bad things about payday loans UK but it is rare to hear about the advantages of them. The truth is that many people who use payday loans actually find that they are helpful to them and that they feel positively towards them. They feel that they provide a unique service which fills a gap in the market. Therefore it is worth knowing about the more positive side of payday loans UK in case you ever need to consider taking them out.
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.
A payday loan can be extremely quick to arrange. Some will let you have the money that you need within hours and others the same day or within days. This is significantly quicker than arranging a loan with a typical bank or building society. It means that if you urgently need to pay for something and you do not have the money, you will be able to get it using a payday loan.
A payday loan will only last a few weeks. They are designed to be repaid in full when you get your next pay day, although some now allow repayment to be in instalments over a few months. It can be reassuring for many borrowers, to know that even though you have to borrow some money, it will be paid back quickly. There will be no loan hanging round for a long time, which can be a scary thing for some people. Although getting money that you need to help out can be a good feeling, it can feel even better when you know that it is paid back and with a short term loan, this will come quickly.
Payday loans only usually lend between £100 and £1000. This means that you will not be able to borrow a huge amount of money. This can come as a relief to some people as it means that you will not end up with a really big debt that feels too big for you to manage. Sometimes we may be in a position, with some lenders, where we can borrow more money than we actually need. This may seem great initially, as you can treat yourself to a few things, but when you have to face up to repaying this large debt it can be really daunting. It is far better to be able to just borrow a smaller amount of money so that you can more easily repay it.
Often with borrowing you will need a local branch of your bank so that you can speak to a staff member about the loan. They may want you to go in and talk to them about the money you want to borrow so that they can check all the details and be reassured that you can repay it. You may even go into the branch to make the repayments. With a payday loan things can all be organised online so there is no need to worry about whether you live close to a place with a branch.
In the UK there is a fee cap on payday loans. This means that charges cannot rise too high. Although there will be extra fees to pay if you miss a repayment, there is a limit on how high these can get up to. Therefore you have some protection against companies that are charging far too much for lending. It can give you piece of mind knowing that payday lenders are monitored and that they have restraints so that they cannot charge unrealistically high amounts.