Do I need a payday loan
The Internet is abound with advertisers for payday loans these days – also known as short-term loans or instant payday loans, they are designed to help you with immediate financial considerations. When getting a payday loan you will find it a fast and quick solution to problems such as; late fees, bank fees, overdraft fees and debts. The question is however if these loans are a good deal? There is no doubt that payday loans guaranteed on the same day are a convenient solution to money problems, you can quickly have the money in your bank account within one hour of approval, but what is the catch with these loans?
The term given to these online loans is guaranteed payday loans – guaranteed to be in your account on the same day – are quite easy to understand. All you have to do is find a lender through the Internet, input information such as income, address and account details – then the money is deposited into your UK bank account. It couldn’t be easier.
So when considering what the downside to these loans are your only left with one, and that is the interest charged. The high rate of interest makes these loans a little less attractive. The reason interest is so high for these loans is because they are taken out over a short period of time, and when reflected on over the period of time they are meant for this seems to equal out. The average interest for a online payday loan is 25% of the amount borrowed, this works out at about £25 for every £100 borrowed. So if you were to borrow £200 you will repay £250.
When describing the interest rate financial institutions are tied to using the annual percentage rates or APR. When describing payday loan charges this APR rate is perhaps a little bit misleading, as it is a annual percentage rate defined over the space of one year, and as payday loans are taken out over a period of 31 days normally this doesn’t really equate.
Even so the rate of £25 for every £100 does seem a bit expensive, the reason payday loan companies give for this is that quite often those taking out a short-term loan via these payday loan lenders have a dubious history in repaying loans. For this reason they are higher risk borrowers and as such are likely to default on the loan – payday loan lenders cover this extra risk by charging more interest.
Guaranteed payday loans with bad credit are an excellent option if you’re facing emergency cash flow problems or if you find yourself short of money and really don’t want to wait. For example if you have a medical bill or dental treatment that needs to be paid – these loans can be relied upon to cover this expense.
So when considering whether to take an instant payday loan guaranteed out you should think about the cost involved and whether you really need to make payments now or you can put them off until next month. Because you have to remember that these loans carry a slightly above average interest. Are they worth it? Well that’s up to you and whether you feel you need the money.
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