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Payday Loans

There are many terms for this type of loan, including cash advance loans, check advance loans, deferred deposit loans or post-dated check loans, which you can get from a variety of sources. Payday loans are also associated with instant loans, quick cash, and bad credit loans.

A payday loan is also called a payday advance, salary loan, payroll loan. It is a small, short-term, unsecured loan, regardless of whether repayment of loans is linked to a borrower’s payday. Payday loans are usually obtained from private lenders, not in traditional banks.

Payday loans are particularly designed for people who need a boost of cash before their next paycheck. These loans are issued to borrowers having previous payroll and employment records. It is called a payday loan, because you generally borrow just enough to get through to your next payday, upon which the loan is due. It is usually repaid in a one-time payment on the borrower’s next payday, or when income is received from another source such as a pension.

This loan is fast, easy money to cover urgent circumstances. Its purpose is to fund unexpected expenses that arise a few days before the end of the month or when you are short for cash and waiting for the next payday. It can be a good option if you need immediate cash during an emergency if you don’t have other financial options.

A payday loan is an unsecured, high-interest loan designed to be taken out over a short period just enough to bridge the gap between paychecks. Loan amounts are typically small, which generally range from £100 to £1,000.

Unlike traditional personal loans, they are arranged over days rather than years. These loans allow lenders access to your checking account or require you to write a check for the full balance in advance. The lender can deposit when the loan comes due. The loan is usually due immediately after your next payday, most likely in two weeks, but sometimes in a month.

Payday loans are pretty easy and quick to obtain. The process is basically the same whether you walk into a payday lender’s store or apply online. Usually, some verification of employment or income is involved. Some payday lenders do not verify income or run credit checks, but this would vary from lender to lender. With minimal paperwork, the borrower can get the funds within hours.

The quick cash feature is definitely great, but when you apply for a payday loan, you might end up getting more than you asked for. Payday loans carry extremely high interest rates. Once you start taking out these loans, it is easy to become dependent on them because of the cost.

If you are in the middle of a difficult financial situation, a payday loan can help you cover emergency or immediate expenses. They are suitable for paying an unexpected payment, going on a short vacation or to buy something you find necessary but don’t have the money at the present time. Covering your bills with a short term loan may allow you to avoid charges for things like bounced checks, bank overdrafts and credit card fees.  Unlike conventional loans and credit cards take a long time to process, the hassle free process of getting the fast payday loan is what makes this type of personal loan unique.

Payday loans can be a useful tool for borrowing a small amount of money for a short amount of time, but are not a good idea for funding unnecessary expenses. When you face certain immediate financial challenges, this loan may be a wise and viable solution, but not for something long-term.

Among all personal loans, it is probably the most risky because of the extremely high rate of interest. Taking a short-term high interest loan that is due in one single payment can have big disadvantages and risks. Rates range from ten to thirty percent, which are considered very high, and failing to pay on time will consequence in doubling the interest for the next repayment schedule. These loans have one of the highest rates of interest, almost comparable to credit card rates of borrowing, and defaulting once could suddenly become double.

Ultimately, payday loans are great cash advances for anyone who can pay them back on time. When used correctly and with good intent, you can benefit from a payday loan. The best way is to borrow only as much as you know you can pay back with your next salary.

Payday Loans in the UK

Payday loans in the United Kingdom are usually up to £1,000 to be repaid over a short period, or until the next payday. Due to the lack of restrictions on interest rates, the usual annual percentage rate or APR for payday loans can be 1,000% APR or more. Payday loans would cost you as much as £25 for every £100 borrowed each month.

The payday loans in the UK are quickly increasing in popularity, with four times as many people using such loans each year. The largest payday lender in the UK is Wonga. In 2014, it was estimated to have a market share of between 30% and 40%. The second largest lender is Dollar Financial Group, which acquired PayDay UK in 2011, then the UK’s largest online lender. It operates The Money Shop network, as well as online lending platforms Payday Express, Payday UK, and Ladder Loans.

Instant Payday Loans

With online payday loans, borrowers complete the loan application online, or in some instances via fax, especially where documentation is required. The payday loan application process has become more fast and convenient with the improvement of technology and online banking. Transactions are easier than ever.

The cash will be transferred through your account in just a few hours after your loan application is completed and approved. The loan repayment and the fees are electronically withdrawn on the borrower’s next payday.

Furthermore, one big advantage of payday loans is that lenders are often open outside of regular banking hours, which allow you to obtain emergency cash loans at any time. Payday lenders have more locations and longer hours than most banks.

Payday Loans for Bad Credit

Your ability to repay the loan while meeting your other financial obligations is generally not considered by a payday lender. Several factors determine how much you can borrow, but your credit isn’t one of them. You don’t have to be worried about your credit score being low because payday loan lenders do not require it.

People with a bad credit history are guaranteed to get the loan when applying for a bad credit payday loan. With a payday loan, credits scores don’t matter. You can access cash within hours with no collateral. People are able to lend anywhere from £100 to £1,000 with creditors willing to let those with a bad credit history make a claim.

Payday Loans with Guarantor

Guarantor loans mean that you can get a personal unsecured loan even if you haven’t got a great credit history. If you’ve been refused by mainstream banks and traditional lenders, this type of borrowing could be the perfect answer for you.

Guarantor loans are great for people with a bad credit history, or no credit history yet. They have become increasingly popular over the recent years. These loans are also quite popular amongst young professionals who are early on in their careers, as they haven’t had time to build up a personal credit history.

They are relatively easy to obtain because the other person is obliged to make the payments instead of you, in case you are unable to. However, finding someone who is willing to take on the risk of the loan on your behalf can be challenging.

These loans typically have lower interest rates than traditional payday loans because they are designed to be paid back over a number of years, and they are lower risk for the lender. If you could get a guarantor for your payday loan, it would be great. If you manage your repayments well, you may even be able to use this loan to build up a good personal credit rating. This means you could eventually get a mainstream loan.

Payday Loans with No Guarantor

They are many great ways to safely borrow money, but you have to be careful if you are asking someone else to take on a risk for you. As guarantor loans are often the only loan option for people with bad credit, you need to make sure that you aren’t asking someone to take on too much risk for you.

Guarantor loans often have lower interest rates than payday loans so they can help you save more money in the long run, as long as you make your repayments. However, if you cannot find a person willing to co-sign your loans, just settle for the traditional payday loan.

Although these loans are usually high in interest rate, take some time to compare and check the rates and fees of different lenders. This way, you can see who offers the lowest and best deals around.

Payday Loans Direct Lenders

As payday loan lenders can achieve large profits from these loans, they employ large broker networks to generate business. Brokers and affiliates are sometimes termed as a loan finder service. However, it can include a broker fee, which is often payable upfront. This means the applicant must pay a fee merely to apply for an advertised loan, in addition to the high rate of interest.

However, you can choose to apply to a direct lender that helps applicants avoid paying these extra fees when applying for payday loans in the UK. With a direct lender, you won’t be charge any service fees and commissions. It is also wiser and efficient to apply to a direct lender because you will be working with only one company from beginning to end of your loan transaction.

Take Aways

Payday loans are marketed heavily to those who are struggling financially and who have difficulty in covering expenses each month. They are quite helpful for people who are tight on budget and have nowhere else to go. These loans provide an option when there are no others.

If you find yourself facing a financial problem and you have no other solution than a loan that will cover you until your next salary, a payday loan is a good option for you to consider. These loans are a quick source of cash during a financial emergency. You might use a payday lender for an immediate financial need such as a medical bill, car repair or other one-time expense.

Payday loans are also helpful for people who don’t have credit cards or savings available. Because the loans do not require a traditional credit check, they are easy for people with financial problems to obtain. They are very attractive to people with poor credit because of the privacy and open-mindedness nature of this loan. Even if you have bad credit or haven’t established a credit rating yet, your eligibility for a payday loan will not be affected. Moreover, since payday loans do not require a credit report, your credit score will not be compromised.

Applying and qualifying for any payday loan is hassle-free and extremely easy to apply and qualify. The only limitations are that you have sufficient income and have never defaulted on another payday loan in the past.

These loans provide the convenience of applying online and getting rid of the hassles of filling out all of the paperwork that comes with traditional loans. After submitting your application through a direct payday lender’s website, you will be approved shortly after and the funds will be transferred into your account within a few hours or within the day.

However, it’s easy to get trapped in the loan cycle of a payday loan because of the extremely high interest rate. It depends on the borrower how effectively he manages the loan and repays it without letting accumulation of a debt pile up.

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5 most recent personal loan reviews

Review of Funding Circle

Very quick response and good safety features. Speak to real people once the application has been logged. Very simple to fill out. Would definitely recommend Funding Circle to anyone.

Review posted by Gary Craigs, Dumfries

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Review of Savvy

Really Great Service! Thoroughly recommend! Have dealt with several loan companies & Savvy is definitely the best, easiest, professional & they do exactly what they say unlike many other financial companies that lead you up the garden path!

Review posted by Helen Stern, Sheffield

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Review of Capital One

I have poor credit and really needed the money to pay a court fine or be up against the magistrate again. Really helped me out and I found the charges for the credit very reasonable. Would highly recommend if your in a pinch. Great customer service and went out of their way to help get the loan out the same night I applied. Started 6pm and had money in the bank before 10pm. Great service.

Review posted by Blake Harrington, Margate

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