Payday Loans: The Pros and Cons

Payday loans are growing in popularity and you may be wondering if this is the right choice for you. Why do so many people choose payday loans and does the good really outweigh the bad? If you are considering a payday loan but don’t know quite what to expect, you are in the right place. We have done a close inspection of the purpose and processes behind this type of money lending. Read on to find out what we have discovered about payday loans.

The Purpose of Payday Loans

Payday loans are meant to be a fast, convenient way to borrow money for a short period of time. Most payday loans are expected to be paid back within a month, and the company takes the repayment straight from the customer’s bank account.

The Benefits of Choosing a Payday Loan

There are some real upsides to payday loans:

  • They are fast. If you are in a squeeze when it comes to money, a payday loan could be a real life saver. It can save you from the hassle of bouncing cheques or the expense of a credit card fee. A loan like this can save you both time and money. Even better, the money can be yours in a matter of hours.
  • They are a great way to boost your credit rating. If you are about to miss a repayment, using a payday loan to meet it is a great way to avoid a dent in your credit rating. On the contrary, repaying your payday loan on time will improve your credit score for the future.
  • They are hassle free. Some companies carry out the entire lending process online, so you do not even have to leave the house to organise your loan. Furthermore, repayments are taken from your bank account automatically on repayment day, so you do not have to worry about taking any action or forgetting to organise your repayment.

The Downsides to Payday Loans

Despite the obvious advantages, there are things you should be wary of when it comes to taking out a payday loan.

  • This is not a long-term solution to financial troubles. A payday loan may help you out in the short term, but it is not something to be relied upon time after time. They are short period loans only. They are also only for small amounts of money, usually £1000 or less.
  • There are qualifications that must be met. You need a bank account for a payday loan. As most companies will take repayments from your bank account automatically, you need to have an account to get a payday loan. You will also need to be in employment to prove you will be able to pay back the loan on your payday.
  • Some companies are fraudulent. Because a lot of companies operate online, tricking potential customers is a lot easier. If you are looking for a payday loan, be very careful who you are dealing with.

If you think a payday loan is for you, choose a reliable, trustworthy company like Loan2Payday.co.uk