Most of us may find ourselves a bit out of pocket at some point, whilst we're not one of the many people who are unfortunately in debt, money may still be tight. Whilst it could be possible to ask friends or family members to lend some money for a short period, for some people this isn't possible or is an embarrassing prospect.
Luckily there is a short term lending option being provided in the form of Payday loans. Payday loans, otherwise known as Cash Advance loans are normally small amounts of money ranging from £100 up to £1,000 and are normally used for emergencies or situations when you need to borrow some money until your payday at the end of the month.
The concept of getting a loan until payday was initially a concept popular in the United States at cheque cashing shops but has now become one of the most popular short term lending methods in use today.
Payday loans are much simpler to apply for than regular personal loans and are much quicker to get money from. The application process can normally be done on the Internet or the telephone with the money being in your account within 24 or 48 hours. The amount of documentation needed is significantly less with most companies needing just bank details and a recent payslip to provide evidence of a steady income. The process is made quicker by not having to carry out any credit checks too.
Another plus that payday loans have is that they need no collateral where as other loans such as
secured loans would need collateral such as property or assets, payday loans are not exclusive to home owners too.
Cash advance loans normally cover emergencies such as: Urgent medical check-ups, car or home repairs, TV repairs, sick pets etc. Although some people have used them for last minute holiday deals where they are pouncing on a limited time deal, in this case not having to wait for payday may mean a huge saving.
Repaying payday loans can be a two edged sword, on one hand this is rather simple to do with options such as cheques or Direct Debit being preferred once you get paid. People who get paid weekly are normally expected to repay loans off after the fourth week's pay from the date of taking the loan.
The downside is that the interest rates are normally higher than the loans banks issue, sometimes 25% or 29% which encourages borrowers to pay off the loans as soon as possible since this kind of loans are not marketed as long term solutions. They are however marketed as quick solutions and for people who borrow infrequently.
So Payday loans are far more accessible than some more conventional personal loans and due to their speed of delivery it can mean you aren't waiting around for credit checks and left out of pocket when it comes to an emergency.
