Payday loans are enjoying a booming industry. No matter where you or what channel you’re watching on the television, you will no doubt encounter advertising for a payday loan. Yet, along with the rising popularity, there are concerns of their benefits; stories of clients unable to repay their loan and finding themselves in far worse debt than before, lead to questions of whether a payday loan is the right choice. So are they good or bad? Should you take out a payday loan online or not?
The key is to be informed – Here are some things to consider before taking out a payday loan.
What is a Payday Loan?
Payday loans offer you money ranging from roughly £50 – £800, that must be paid back in a short term: usually 1-2 months. They are quick and easy to get; and the companies will usually consider your application, even if your credit rating is poor. The money can often be paid into your account mere minutes after your application has been approved. So, if you have any sudden expenses such as a car repair bill, a payday loan can be the ideal solution to a cash flow shortage.
Paying back the Payday Loan and Interest
Payday loans are, however an expensive way of borrowing, and can lead to difficulties if you are ill informed; or don’t take proper care that you can afford to pay the money back plus the interest.
£25 interest for every £100 you borrow is the standard charge of payday loans, which is an APR of 1,737%, but for a standard credit card the charge would be £1.50 with an APR of 18%. This shows a considerable difference and is something to bear in mind before applying for a payday loan.
Also, be aware; if you are unable to pay back the loan in the required time, the interest and added fees will rise, meaning you will have to pay far more than what you initially borrowed, and could find yourself with bigger debts.
Applying for a Payday Loan
Be 100% sure that you can pay back the loan on time. Check the interest rates of different companies and always use caution.
Avoid any “special offers” like loan extensions or deferrals. If you are in difficulty paying the loan on time, the company may offer an extension. However, payday loans are only successful if kept short-term. If you decide to extend your loan; the longer you do so, the more interest and additional fees you will have to pay.
You may think a quick solution would be to pay off your payday loan with another loan from a different company. It can be easy to apply for two payday loans at the same time from different companies, but this will aggravate the problem, not solve it; as you will end up with more debts.
Any payments you miss can have a negative effect on your credit rating, so it is important to ensure you are able to pay back the loan; especially to avoid any difficulties borrowing money in the future.
While there are certainly cheaper alternatives for applying for a loan, payday loans do hold a strong place in the industry. In the case of emergencies, where cash is required quickly on a short-term basis, the payday loan is ideal for providing a fast and reliable service for everyone, provided they are used sensibly.
If you urgently need a small amount (up to $ 1,500), and you really appreciate your financial opportunities. And we are sure that you can repay the loan and interest, then try instant payday loans from Get Cash N Go over the phone or online. Before you agree to the terms, ask about whether you will be able to refuse that loan if you do not suddenly need.