Payday loan is also known as salary loan or cash advance loan. It is originally from the US but is very famous and is quickly growing in the UK market. Many people are using this because of its nature, a short term loan or credit payable under two (2) weeks or “payday”, thus the name Payday loan. Payday loans are reliable despite the interest rate of your credit.
A payday loan, as they say, is the most convenient way of producing money especially if you really need it – emergency money. What they (firms that accept loans) require are payroll and employment records, easy to provide documents. People who avail of this type of a loan are those who have bad credit, low income and do not have access to credit cards. They use payday loan to cover their living expenses or unexpected emergencies through the course of the week or a month.
There are consumer credit firms that offers short term loans that are payable in a single payday or maybe a month with annual percentage rate of 1,000 % or more in a year. In the UK, you can apply online for a payday loan. Once application is approved, within 24 hrs upon approval, the payday loan is paid straight to the borrower’s account. Upon repayment, it is directly taken from the borrower’s account with its interest. Easy come, easy go as what borrower would have to say.
There are other payday loans that can be extended depending if the firm offers extension. If they do, they will charge the borrower to extra interest, extra fees and extra charges. This means that the borrower will have to repay extra money to the lender. This is somehow being avoided by borrowers since you need to repay more money, more than what you borrowed.
Because of the high interest rate for payday loans in the UK, there are acts established to protect the rights of borrowers from lenders from charging very high interest rate. Before lenders can offer payday loans to consumers, they must acquire a license first from the UK Office of Fair Trading as stated under Consumer Credit Act 1974. Advertising the lenders firm also requires them to state their annual percentage rate (APR). Advertising on social media were prohibited as lenders cannot guarantee that their APR is stated in their adverts. Some other websites have stopped advertising payday loan adverts because of this reason.
Payday loan is very easy to acquire, with just copies of payroll slips and employment records, viola! You can now have the money that you needed. It is very helpful especially if you have an emergency and you don’t have money or have short funds. But before one borrows, he must be prepared to pay. Payday loans are for short term use only. One should not rely on loans such as this; one must know how to save for emergencies and for future use.
Payday loan is not only known in the UK but also around the globe. Interest rates may differ, but the concept of the loan still applies. For a person who lives only from pay check to pay check, you must know how to save your money and think of using payday loans on time that it is badly needed. It is better to be prepared than to be buried in debt.
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