Payday Loans Advice

Payday Loans - Are they right for you?

Payday loans are a fast, easy way to get hold of some cash to help get you through until the end of month. Everyone on a salary has at some time or other spent too much at the beginning of the month and found themselves short of cash. This is what payday loans were developed for.

They first appeared in the States but lenders in the UK soon realised the demand for fast unsecured loans was very much here too, especially in the current financial climate.

Unlike their American counterparts though, the UK lenders are not forced to cap their interest rates and can charge as much as they like. Also, in America there are laws in place to protect the consumer from getting into serious debt but here there is no prohibition on 'rolling over' lending forced onto these companies.

Most of the UK lenders have a very similar criteria for potential customers:

• You need to be 18 or older
• Have a regular monthly income of £300 or more
• Be a resident in the UK

Many don't do a credit check (although some will take your credit rating into account before deciding on your loan application) and usually will have the money in your bank account either the same day your application is accepted or next day at the latest.

Where the Payday lenders differ from each other is in the amount they will lend and the amount of interest they charge.

While most potential customers will be looking for the amount they can borrow its also important to check what you will be paying back - Remember, someone has to pay for all those annoying TV ads!

We mention the TV ads because while investigating the interest rates charged by the various payday loan companies it soon became apparant that the dearest ones were those spending heavily on advertising.

Wonga for instance charge a whopping 2689% APR while the less well known Mister Cheque has rates varying from 67% to 108%

As you can see, if you need a quick cash injection it pays to shop around before applying for any of the payday loans.

Payday Loans Do's and Dont's

Because payday loans are so easy and convenient many borrowers find themselves returning each month for another loan to cover the wages they spent paying last months payday loan!

To keep from falling into a debt trap follow our simple do's and dont's:

• Don't borrow more than you can comfortably pay from your next salary without going short
• Don't be tempted to borrow more than you need - the interest is high for these quick cash loans so only get enough to cover your emergency
• Don't take the first cash loan offer you see, shop around as rates vary wildly

• Do consider these cash same day loans as a last resort
• Do consider asking family or friends first so you aren't hit with the high interest charges
• Do read the small print - some lenders WILL do a credit check and this can effect your credit rating