The cost of living has increased significantly since the financial crisis of 2008/2009. Economists estimate that the cost of living has risen by up to 25%. We have seen a 67% increase in the cost of car insurance, 37% increase in gas prices, 25% for electricity and 25% for rent. Coupled with the stagnation in wages, many people are facing their own financial crisis. We can no longer afford to live, and this is becoming increasingly true for an increasing number of people.
As a solution for short-term money problems, people are turning increasingly to Instant Payday Loans UK. A payday loan can really help in some instances. However, it is important to understand a little about the loans before applying for one. People who take out the loans without understanding how they work can fall further into debt. Nobody wants this. Below, we weigh up the pros and cons of the payday loans. Our guide will help you to understand whether they are right for you.
They have a very fast turnaround: it takes a few minutes to apply for a payday loan. As soon as the application is complete, the lender will let you know immediately whether you are successful. Once you have been accepted for the loan, the money can be in your account within a couple of hours – sometimes even faster.
It only takes a few minutes to apply, and you can do it from the comfort of your own home. Wherever you have internet connection, you can apply for a loan. This means no long- winded trips into town, no navigating the high streets, and no hunting for that much-valued parking space.
There are many options available to people applying to a payday loan. You can choose between a range of loan amounts and interest rates. Simply browse the market to find the best rate for you. There is also greater choice in loan amounts. At a traditional bank, you can usually get a loan of £1000, but they tend not to lend smaller amounts. However, the payday lenders are willing to lend as little as £75, which is a lot more suitable in some instances.
The cost of borrowing: In comparison to the high street banks, the APR is higher on a payday loan. However, they are intended for use over the short term only, and so the APR is not a true representation of the cost of the loan. Often, the payday lenders charge £30 per £100 borrowed, which sounds a lot, but actually reflects the fact that they are short term and that they are taking a greater risk in lending to people with a poor, or no, credit record.
As with any loan, you will incur a charge if you miss the repayment schedule. The charge is not strictly a charge, but rather is an extension of the original cost of the loan.
The important thing to remember with a payday loan is to make sure that you are able to meet the repayment amounts. As long as you know that you can, then a payday loan will work for you.
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