A payday loan does just what the name suggests - it gives
you the money you need to get you through to payday. A payday loan
is therefore a short-term loan to be repaid in full (usually)
within 30
days.
Is a payday loan good value?
Payday loans are a lenders dream ticket but a potential
nightmare for the borrower. Interest rates on payday loans are
nothing short of astronomical at a typical £25 for every £100
borrowed. The APR on some payday loans are as high as 700%, and
it's these kinds of figures that makes this loan a bitter pill to
swallow. Of course, strictly speaking the APR should be irrelevant
because the loan is intended to extend to a maximum of 30 days,
however, consumers can extend the loan indefinitely.
Why do payday loans get bad press?
It is usually the most desperate who apply for payday
loans and because of this, consumers can find themselves borrowing
from one month to the next. Finding themselves in a financial trap
with spiralling repayments, the consumer can end up repaying the
loan at full APR. Furthermore, many lenders do not inform the
borrower of the consequences and some even offer to extend the term
of the loan beyond the 30-day norm.
For more information on loan risks, please visit www.debts.org/loans/borrowing_risks
Are there any loan
alternatives?
Your credit rating will determine the amount of lending
options available to you, and a payday loan should always be a last
resort. Debts.org is an independent website custom made for the
consumer. If you would like to compare loans and apply online,
visit www.debts.org/loans, or
perhaps you need some information on mortgages, credit cards,
bailiffs and credit reports? For this and more visit our homepage
at www.debts.org.
