What are payday loans for?
August 25, 2008
Have you even reached the middle of the month, when payday is still a couple of weeks off, and encountered some form of emergency where you need to raise finances that you simply will not have available until payday? This is something that has happened to many people, and something such as an unexpected bill, an emergency repair, or even an unexpected event can result in the need to find money when payday still seems a long way off.
If you have savings then there is no problem, as you can simply dip into these until you get paid. Likewise, some people may find that they can approach family or friends to borrow the money for a couple of weeks until they get paid. However, for some people these scenarios are not an option and they have to think of another solution to raise the money. Those without credit facilities such as a credit card may find this particularly difficult, and if you have damaged credit as well the options become more and more limited.
This is where a payday loan can help. These loans are designed to help those that are in need to a modest amount of cash for a relatively short period of time, such as a few weeks. Most payday loans are for between £100 and £1000, and have to be repaid within a thirty day period. However, some payday lenders do allow the borrower to roll over the loan from month to month, although the borrower will still have to pay the fees involved each month in order to do this.
One of the major advantages about payday loans is that there is no credit check involved, so even those with damaged credit can get the short term loan that they need providing the meet the other criteria. You will need to be in employment, and you will have to prove your income by way of wage slips or bank statements. You have to have a bank account, and you will also need to prove your address.
The interest rates charged on payday loans can vary but in terms of APR is quite high. However, the way that lenders usually charge interest is a flat fee per £100 borrowed – so, for example, some lenders may charge £10 for every £100 you borrow. These fees are then charged again if you decide to roll the loan over for another month. The fees charges can vary from one lender to another, so this is something that you should compare.
One of the other good things about payday loans is that you can get your hands on the money pretty much straight away. If you make your application online then it may be the next day, as you will need to fax your documentation through to be checked. However, you can also call in at branches of payday lenders, and you will then be able to get the money in your hand.
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