Loans

A Guide to Payday Loans

If you are thinking about searching for some form of credit, you’ll most likely have thought about applying for a loan through the traditional means of a high street bank or other traditional lender, looking at whether a credit card is feasible to your lifestyle, or whether you should just increase the overdraft on the current account you have with your bank. One other option is to take out a payday loan, especially if you are in need of just short-term financial respite over the next few weeks or months. Responsible payday loan lenders now provide people with a quick and easy way to acquire help with short-term financial problems, resolving issues in a fast timeframe, whilst making it clear exactly how much money must be repaid within the agreed timeframe, including the fees and interest on top of the initial loan sum.

A payday loan is a loan that has been designed to help out those people who only require short-term financial assistance. They are usually offered between £50 up to £10,000 in most cases, with loans being repaid over a period of a week, up to 3-months, depending on the amount borrowed and the personal circumstances of the borrower. Although they do have a high APR, a payday loan is designed to be paid back within a short amount of time, when an applicant next gets paid by the original definition, so the long-term negative impacts of a high APR should not come into play at all.

Always ensure that you have enough funds in place to pay back on the agreed terms of a payday loan, as you will be expected to set up a direct debit to ensure funds are taken promptly and regularly. There are charges for missed and late payments that can significantly increase the amount owed, so be careful. To apply for a payday loan you must be over 18, have a bank account and a phone number and that’s it. Some lenders offer access to bad credit loans, so even if you have a poor financial history you could gain access to a payday loan, as long as you can show the means to pay back the loan.

Remember, that it always pays to conduct thorough research into whichever form of credit you decide to make an application for. With payday loans there are quite a few benefits, from the quick access and simple online procedure (in most cases), to the recent wave of responsible lenders that don’t hide any fees or extras from you. Always be prepared with a clear view of exactly how much you can afford to pay each month as part of your repayments and you won’t be stretching your finances too far and potentially putting yourself in greater difficulty in the future. If you do see a change in circumstances, always immediately talk to your lender about your situation and let them know what you can afford to pay and for how long, with a view to renegotiating the terms of repayment or freezing payments and/or interest for a set period of time.

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