Not yet registered? Create a OverBlog!

Create my blog

Instant payday loans: The facts

Payday loans are small scale borrowing for short periods of time. This system has some very clear short term advantage, but also has its critics claiming these online lenders are little better than loan sharks.

Benefits

Description The idea behind instant payday loans is that a person can borrow a small amount of money and pay it back, with interest, when they get paid. The loan can be applied for, approved and paid within a few hours with only confirmation of employment as a guarantee.
Application and Approval Payday loans can go from application to cash-in-hand in a few hours. All the companies require is confirmation that the applicant is employed in order to offer a guarantee the loan can be paid back. There is also no credit approval check, so even people with bad credit history can apply with a good chance of being accepted. Loan Structure The most attractive thing about a payday loan is it's structure. A small loan can be taken out to cover an unexpected bill or other payment with the safety of not having to pay it back until the regular pay check clear in an account. The monetary amount and the time scale of the loan are entirely up to the person requesting the money. This gives the borrower a lot of freedom to manage both the loan and their bank account. Interest Rates Contrary to popular belief the interest rate repayments on these loans are not excessive. In fact, little more than the average credit card. Interest rates will vary from lender to lender so it is best to shop around.

Drawbacks

Legal Agreement All loan agreements are legally binding, so taking out a short-term payday loan can still lead to legal action and the risk of repossession. Several of these payday lenders are now registered with regulating bodies and so, they have the full force of law behind them. It is worth making sure that the lender is registered with a regulator to ensure the company will not scam the borrower. Late Payback The myth about the excessive interest rates comes from when the loan is not paid back on time. Once the repayment date has passed, the interest rate can go from around 10 percent to several thousand percent. Short-term It is very important to remember that these loans are short-term solutions. Therefore, they should not be viewed as an easy way out. An example of the problems arising from this includes people who take out a loan to pay off the first loan, leaving themselves in a perpetual circle of debt repayments.

Same category articles Banking

No interest UK credit cards

No interest UK credit cards

Discover more than one way of enjoying your credit card with no interest. Promotions are often held to entice new sign-ups and you can take advantage of these. Learn all this and more by reading this article.
A basic guide to the Proceeds of Crime Act

A basic guide to the Proceeds of Crime Act

The Proceeds of Crime Act 2002 extended the law relating to money laundering by targeting the proceeds of any criminal conducted in the United Kingdom. The aim was to deprive criminals of money and property accumulated by means of illegal activities. The Act has since been amended by the Serious Crime Act 2007.
How to refinance credit online

How to refinance credit online

Looking to refinance credit online is a simple undertaking. You can refinance a student loan, refinance credit (revolving) and even a mortgage refinance. You just need to know where to look and what to watch out for.
Where to apply for cheap car loans online

Where to apply for cheap car loans online

When you take on a secured loan , like a car loan, cheap loans can be obtained if you have good credit. Often, however, going to the dealership is the worst way to get a loan since the financing may not be advantageous for you and you might not get a good rate. To get the best possible car loans for you, you should consider shopping online first. However, you need to know where to look.