As the credit Crunch realy starts to bite more and more people are using Payday Loans to cover for emergancies. They are a fast and simple way to secure a loan that is repaid when you get paid.
What are Payday Loans ?
are a very simple and hassle free way to get a short term loan until you get paid at the end of the month. They can be used for emergancy borrowing when times are tight. For example, you have to travel to work by car as public transport is just not an option. Your car breaks down and you cant get to work, catch 22, no car, no work therefore loss of pay - a visous circle. with a payday loan you can get an emegency loan the same day paid straight into your bank account and get your car fixed. Problem solved.
How do Payday Loans work?
Very simple. You can apply for a Payday Loan via the internet using a single page form. There are no credit checks and you can have the money the same day. The only requirements are:-
1) Yo must be over 18
2) You must be in full time employment and earning more than £750 per month.
3) You must have a bank account to pay the loan into
4) You must have a debit card. This card will be used to automatically take the loan amount back out of your bank accounyt when you have been paid.
Can I get a Payday Loan?
If you are over 18, in full time employment and earning more than £750 a month, you are likely to qualify. All you then need is a bank account for us to pay the loan in, with a debit card for you to repay!
What information do they need?
Generally the simple online form requires the following information:
Your name and address
Your date of birth
Your contact telephone numbers and email
Your work and pay details
Your bank account and debit card details
Why do they need all this information?
As responsible loan providers the company have to verify:
That it is you taking out the loan
That you are in full time employment and able to repay the loan
That they put the money in your account and no-one else’s account
That you can repay them in a simple and hassle-free way
How long does it take?
It takes as long as it takes for you toi fill in the form. You will get an instant desicion once you have completed the online form. Once approved the money will be in your account the same day. Note with some banks it may take 1-3 days for the money to clear.
How much can you Borrow?
You borrow from £80 upto £750 depending on your circumsatnces. Below is a table showing what the costs of payday loans are:-
Amount Borrowed Amount you repay
£80 £100
£100 £125
£200 £250
£300 £375
£400 £500
£500 £625
£600 £750
£750 £937.50
Now this equates to a Typical APR of 1845% which sounds horrendous but lets look at some comparisons of other types of lending.
Type of Loan Amount Months Total repayment APR Actual Interest
Installment £500 36 £745 16.9% 49%
Installment £500 60 £970 16.9% 94%
Payday Loan £500 1 £625 1845% 25%
This puts things into perspective. The two longer term loans seem to have much lower interest rates (APR) but in reality you will end up paying a lot more back then if you borrowed in comparison to a Payday loan, this is why Payday Loan companies always focus on the actual amount you will pay back not the Interest rate. Personally I think that if I needed to borrow money for an emergency I would prefer a payday Loan to a normal long term loan as it will be cleared the next time I get paid.
How do I pay back my loan?
Easy – the loan company will take the agreed repayment amount from your debit card on your next payday – there’s nothing else for you to do.
Can I defer my payment?
Yes - although after deferring the payday loan twice they will ask you to start reducing the balance. Deferral will incur new charges for every month the loan is deferred – but still at our fixed rate – there are no additional charges.
What if your payday or debit card details change
If your payday has changed, or you have a new debit card, just contact the customer services department and they will change your details straight away.
What if I have problems paying?
Payday Loan companies understand that people’s circumstances can change. If this is the case, you must let them know as soon as possible and they will always do their best to help.
The most important things to note are:
Don’t borrow money you don’t think you can pay back
If you are having difficulties then always contact the company as soon as possible and they will help.
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September 24th, 2008 at 11:37 am
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September 25th, 2008 at 2:02 pm
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September 25th, 2008 at 11:06 pm
What I love about Payday loans is that they are meant to be short term and can help in a tight situation if you are running a little short on cash during the month.
September 27th, 2008 at 12:09 am
Payday loans are a great source of cash in an emergency. Be sure to do your home work and understand the terms of repayment. If you find yourself unable to pay off the payday loan without taking out another payday loan then you should establish a budget and stick to it. Payday loans shouldn’t be used for the long term. Here’s a couple of good places to start doing your homework: Good Payday Loans and Instant Payday Loans Now
October 2nd, 2008 at 9:03 pm
The charges on Payday loans are less expensive than bouncing a check or paying late fees. It’s also a great option for someone who doesn’t want to get caught up with credit cards debts. They can also help in a tight situation, its quick, and most places are open longer hours than banks.
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