Payday Loans - Emergency Cash Loans

Fast Cash for UK Residents

A payday loan is a type of credit that is taken out in small amounts over a short term, generally up to £1,000 over a few weeks. They are quick to arrange and are repaid on the borrower's next payday.

Most commonly used to provide funds when the borrower is short of cash and unable to use another source of finance such as a personal loan, payday loans have been growing in popularity as economic times get harder.

Expense

As is well known, however, payday advances suffer from a major drawback: they're expensive when compared to other kinds of finance. Rather than charging interest, they generally work on a flat-fee arrangement. Typically, for every £100 borrowed, somewhere between £110 and £130 will need to be paid back. When translated into APR figures this leads to eye-wateringly high percentages, although this is perhaps misleading as they APR system is used to measure interest on longer term loans.

Another problem is that when your next payday comes around, it can be difficult to repay the loan in full and still have enough cash to see you through the month. Although payday loans can usualy be renewed or extended for another month, another set of charges will be applied, and this can quickly become and expensive cycle of debt and borrowing.

Nevertheless, payday loans have their place. If you need fast cash to cover a temporary shortage of cash, then they are worth considering so long as you take one out in full knowledge of the potential dangers, and don't rely on them as a long term solution to financial difficulties.

Payday Loans Advantages:

• Quick to arrange and pay out


• High approval rates


• Widely available

Disadvantages:

• Expensive


• Can be habit forming