Needing fast cash this Christmas season? Have you thought about a Payday loan? It is fast, easy to apply and requires no collateral. You have to be aware of the interest charges, which are often very high, though.
Applying for a payday loan is very simple as it is an unsecured loan. You can use this as your vehicle to get a quick cash this Christmas or whenever you need a short-term loan, though read what we say about interest charges later in this article.
A payday loan has some advantages, but the most significant of all is that these loans are instant and are approved on the basis of your next payday. With the easy access of Internet, the borrower can fill the form online and the cash would get transfer within 24, or 48 hours, directly into your bank account. People with regular residence and employment are usually eligible for this cash loan as long as they meet the lenders earnings requirements.
One of the biggest benefits for people with debt problems that need money fast, is that many payday lenders do not do a credit check during the application process. Do remember that you will be paying high interest charges though.
The bank account of the borrower should be at least three months old. The loan amount ranges between £100 and £1500.
The borrower has to pay back the loan amount within 14 to 31 days. This much time allows the borrower to sustain himself with enough money till he receives his next salary. Any due amount is deducted from the person’s account on the time of next pay day.
Many payday loans are available in the market and it is the responsibility of the consumer to choose the best among available payday lenders. Lenders such as Payday Bank take a responsible attitude to their lending decisions and will only loan money if they feel that the borrower can repay it. But applying for a loan does not guarantee that you will get the amount in your account. A number of factors are taken into consideration by the payday lenders, to decide whether to sanction a loan or not. Most important eligibility criteria include:
- The applicant should be a resident of the UK
- Should be of at least 18 years of age
- Be in full time employment or be able to prove earnings through self employment
- Meet minimum salary requirements (around £750 per month)
- Some lenders have minimum take home pay requirements (salary after tax and deductions)
Whilst there are benefits to taking out a payday loan, you should be aware of the very high interest rates that most lenders charge. Some lenders charge £25 for every £100 borrowed. So if you borrow £500, you will actually have to pay back £625. That equates to a 1737% typical APR.
With such high interest charges, it clearly makes sense to borrow on a credit card rather than taking out a pay day loan, however if your financial situation dictates that you need immediate cash then a payday loan may help you out of a difficult situation as long as you actually pay it back as soon as you possibly can.
If your financial situation is deteriorating and you are starting to run up debts that are becoming difficulty to repay, it makes sense to consider debt management advice, before your situation starts to spiral out of control.