The Lesser Known Facts about Instant Payday Loans

As the festive season is just about to start, British households have started to plan out for grand celebration forgetting all the worries for the time. It is no more a hidden fact that the majority of British people are facing problems in managing the monthly dues because of imbalanced wages growth during past couple of years. Over 53% borrowers accepted living expenses and utility bills as the prime reason for getting payday loan. When the options for getting affordable financial help with least efforts without involving the brokers are explored, instant payday loans emerge as the most preferred choice of employed people. 

Why Should You Opt For Payday Loan In The UK?

Payday loan is a short-term small amount credit. This same day financial help is made quickly even to those possessing bad credit history or lower regular income. In January 2015, FCA introduced a cap on interest rates to be charged over payday loans to make them more reliable and reasonable for employed people. FCA’s involvement boosted the trust of people in this short-term borrowing option; as of today, it is the most sought after financial help type. The generally agreed amount of payday loan is £100 – £1,000; it is sufficient to meet out more likely emergency expenses. In 2017, the single payday loan amount requested was £100, while the average loan size was £260. This loan can be taken as when required as many times as you need it from the same lending agency provided previous due is clear. The available statistics show that most applications for payday loan were received from the people earning about £1,500 per month.

Payday Loan Borrowers Believe More On Direct Lending Agencies:

The small amount payday loan can be had from more over 240 lending agencies and online 2,000 loan stores all across the UK having online presence. Easy access to multiple loan stores and freedom to compare while sitting in the comfort zone make the direct lending agency a preferred choice of borrowers. Most of the mainstream regular banks in the UK don't offer this loan product, so, the borrowers have only one source to trust. Almost 83% of borrowers took payday loan online whilst just 29% took it from loan stores and 12% of payday loan borrowers used both the channels.

You Essentially Need To Compare Payday Loan Offers:

Although payday loans are regulated by FCA in the UK; still, you will see considerable difference in proposals that you get from different loan stores. The terms and conditions create huge difference in total money that you pay. Credit score also affects the proposed interest rate. Although payday loans are the single installment loans but if you fail to repay complete at first salary day, late payment charge is levied that harms the debt history further. Failure in payday loan repayment can lead you to complex financial problem because it is more expensive debt than other debt formats. The instant payday loan is good only if you are confident to pay it comfortable on scheduled date. If you need small amount for Christmas celebration, it is good but relying totally on it would not be a good idea.

Alternatives to Payday Loan for 2018 Festive Season:

Ask three questions to yourself- What type of expenses do you have to meet out? What types of debt do you already have? What is the credit score? Taping your emergency funds can save you from taking payday loan. Borrowing from friends and family is the widely used practice to avoid fresh borrowing from direct lending agency. Taking advance from the employer is also a good alternative to payday loan. Taking overdraft facility from your mainstream regular bank may also help you avoid payday loan. If all these alternatives don’t click for you, prefer to take personal loan at least for 12 months.

Conclusion:

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Created on Nov 19th 2018 06:45. Viewed 970 times.

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