The Advantages and Disadvantages of taking out a Payday Loan
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by: Ashleigh Preston
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Payday loans are designed for working people who need an advance on their pay, usually for an unexpected bill or a hurried payment, or just to keep you afloat financially until payday. But you need to remember that when that payday comes, you have to repay the loan. This is one of the many factors that should be considered when exploring your options. Let’s take a look at some of the advantages and disadvantages of payday advance loans to help you understand what would be the best course of action for you to take.
One advantage is that payday cash advances are a quick and simple way of boosting your immediate finances. They can be applied for online quickly and easily and you do not need all of the extra documentation, signatures and long waits to receive an answer to a loan application. They offer a quick fix solution to short term credit needs. Payday loans are appealing because you can get the money you need the same day you apply for it, if you submit your application early enough in the day, and on a working day. If used correctly, and paid off as soon as you get paid, they are advantageous because you do not have extra payments and worries about a long-term debt.
In some cases payday loans are a cheaper option when you are faced with the alternative of charges from your bank for bounced cheques, missed credit card payments, or going over your overdraft limit. If you have several items coming out of your account at the same time, and don’t have the funds to cover these payments, then a cash advance could work completely in your favour. Even getting charged £35 (on average) by your bank for a bounced cheque is more than the interest you could be required to pay on the amount you borrow with a small payday loan.
Now, let’s weigh that against the negative factors that you will need to think about. Payday loans offer a fast and useful service, but this also comes at a price. Providers generally charge applicants £20 for every £80 borrowed. Sometimes paying this interest works out a better deal (than having to pay bank or credit card charges, for example) but, if you find that you cannot afford to pay back the cash advance loan, you may find yourself paying an interest fee each month which could work out much worse for you in the long run.
You need to remember that payday loans are a quick fix and cannot be used to sort out a longer-term credit or debt problem. You need to make sure that, when applying, you have the right reasons for choosing this option.
The most important fact to remember is at every person’s situation is different. Be sure to look at all of your options and go with what is best for you and your finances in the long term.
About the Author
Ashleigh Preston – Marketing Manager – Payday Express offers a fast, effective service which is completely confidential. Range of loans includes payday loans, bridging loans and cash advance loans. They understand how costly life can be and how long the wait is until the next payday. Contact: Ashleigh Preston Marketing Manager Payday Express Email: ashleigh@expressfin.co.uk
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