Payday loans are among the easiest loans one can get; with a full detail of your income, and an advance post- dated check from you, you are good to go. The post-dated check is usually not long than few weeks—a month since it is a short-term loan. Payday loans UK is be the best alternative for people in temporal difficult financial situations.
As simple and easy to understand as this loan is, it is not meant for inexperienced borrowers; that is, those who are still finding it difficult to control their cash flows. Payday loans have addictive tendencies; if not properly controlled, might make people financially irresponsible. They become uncontrollable most times. At first they may look harmless and affordable, but over time become heavy financial burdens.
So, there are factors to consider before taking out payday loans.
High interest rates
High interest rate is one major criticism of payday loans. The amount you borrow isn’t what you pay back; what you are to pay back is much higher than when you received. Their charges and interests are added to what they lent you based on the agreed terms and conditions. It is required of you to issue a post-dated check and failure to pay back the loan on the repayment date attracts higher interests and financial charges.
Different states have regulations governing them in regards to payday loans. The term limit of 30 days is the general repayment time. But these lenders are somewhat cunny; they issue loans with less than 30 days repayment time, placing the borrower at the mercy of the lenders.
When you aren’t able to repay the loan as at when due, the lender will present you with other repayment options; which might entail you renewing your loan amount or to apply for a fresh loan. A fresh loan that would come with separate financial charges and extra charges; this is why people are advised against taken out loans they won’t be able to repay. Doing otherwise would only compound your debts.
Payday loans aren’t for wants.
One thing people misunderstand about payday loans is that, they are not taken to meet wants. These loans are meant for needs that arose in financial difficult moments. They are not the kind of loans you take when you want to go on vacation, or get a new car. They are taken out in financial emergencies; like repairing your car, paying utilities or emergency hospital bills. That’s why they are termed short-term loans, because you are expected to pay back these loans when you are financially stable.
Accessible to all borrowers
These loans are accessible to both lower and higher income earners; a borrower is granted loan based on his income. Though there are limits to which you can borrow but, a borrower’s income also determines how much he/she can borrow. People who may not be eligible to get loans from other sources can be granted payday loans as long as they have steady source of income.