Your Guide to Payday Loans
Payday loans have significantly boomed in popularity in recent years. There has been a massive increase of people seeking the help of these short term loans as a solution to their financial hurdles. However, before you send in your application for this loan, you need to read our complete, highly informative step-by-step guide to payday loans so that you can make the most informed decision.
What are payday loans?
In simple terms, payday loans are just small loans which you can use if you find yourself out of money temporarily. These loans are provided in modest money amounts with a short term repayable period of about two weeks, in most cases. Payday loans are unsecured and best used for covering temporary cash gaps. If your car breaks down unexpectedly, for example, you might find yourself really struggling to finance the repair bill. Taking a payday loan in this case is one of the ways in which you can cover such an emergency expense.
How are payday loans different from other loans?
The main difference between payday loans and other loans you can get in the financial market is the short repayment period. Ideally, upon taking your payday loan, you are required to repay it within one or possibly two weeks. In general, payday loans act as a financial bridge to your next wage and thus, you should repay them upon receiving your next paycheck. As a result of their characteristic short period of repayment, payday loans have a small credit limit and a relatively higher APR.
When is the best time to use payday loans?
Payday loans are best used during emergency situations (the car example that is highlighted above). Nevertheless, you can still use a payday loan in any situation, provided you know that you will get the money to repay the loan when you get your next paycheck. So, if you need money straight away to sort out an issue and you can’t wait for your employer to pay you, then you might want to consider getting financial relief from a payday loan lender. However, it is not advisable that you keep applying for payday loans for things that are unnecessary. Use payday loans only for an emergency or a sudden necessity. Here is a very good post about 10 Things You Shouldn’t Take Payday Loan for.
How much do payday loans cost?
Even though payday loans are known for providing financial help at a time when you might have nowhere else to turn to, these short term loans are seriously expensive. In fact, the average lender of payday loans charges no less than £25 as interest for £100 borrowed, with the repayment period generally ranging between 7 to 28 days. Other charges may be included besides the interest, such as a processing fee, though this will depend on the lender. Even though these interest rates are high, it is still possible to get a better deal if you shop around for the lowest APR that you can possibly find on the market.
What are the problems with payday loans?
Getting approval for a payday loan is relatively easy and if you are having problems with paying the back the loan, it is not unusual to find your lender tempting you with an offer of a extension, which is known as repayment plan or a deferral. You might think that this is a great solution for your financial problems but, the truth of the matter is that you will only be able to manage these loans if you borrow them on a short term basis, i.e., not more than 30 days. Extension means paying more interest and possibly other fees. In the long run, you will find yourself with unmanageable debts, which can seriously ruin your financial life.
You might also consider applying for another payday loan from another company intending to use it for repaying your first one. This is a financial massacre and your debts will start growing very quickly. You will find yourself in a vicious cycle of debts that will be nearly impossible to get out of. Missing payments on your payday loans can also tarnish your credit rating in a serious way and this might also compromise your ability to borrow in the future.
What makes Peachy.co.uk unique, compared to other payday loan lenders?
Peachy.co.uk provides various options of short term loans that offer borrowers further benefits above what the standard payday loans offer. Peachy.co.uk is a responsible lender and offers loans with multiple repayment options, which are a good alternative to payday loans. The loans offered by Peach have a very clear pricing structure and have flexible repayment options. This way, you are able to understand the loan fully and customize it to your personal situation. The line of credit offered here provides you with instant access to a complete credit limit and you can choose exactly how much you want to take, something that payday loans don’t offer you.
At Peachy.co.uk, you are even able to pay your loan in installments which you select based on your current financial situation. Therefore, you don’t need to worry about having to pay the whole loan in one lump sum payment on your next payday. Once your application has been approved, cash will be sent to you within minutes and you get 24/7 access to the loan services support department. Peachy’s loans are without a doubt the best alternative for payday loans as they provide you with the best solution to solve your short term financial needs and that are perfectly tailored to suit your requirements.
Peachy.co.uk has deeply engrained the values of fairness, honesty and transparency into their core business and the loans availed are designed in the most flexible and straightforward way possible. All in all, it is always important that you compare short term loans from different lenders just to be sure that you are getting the best deal possible.