Advantages Of Pay day Loans

With the current economic climate the way that it is, it can be hard to keep on top of the bills, and even harder when unexpected costs appear. Not everybody has someone that they can lend money from and not everybody wants to borrow cash either. However, if you do need some extra cash then you have to find it from somewhere. One option that is becoming more and more popular is the payday loan, and while these have got plenty of bad press, they also have their advantages. What are the advantages? Taking out a loan can seem scary, but with a payday loan it isnt all bad. Can get the money fast With a payday loan you can get hold of the money quickly, in most cases this can mean as quickly as the next day.This is great if your looking for a short term loan This means that these options are great if you need the money in a hurry or if it is an unexpected expense as the money can be available to you instantly. Available to everyone Payday loans are available to everyone as long as you are over 18, a UK citizen and have a bank account. Even if you have been declared bankrupt in the past or have a bad credit history, you will not be refused for a payday loan whereas you may be refused for other larger loans. This means that if you really need the money, you dont have to worry that you wont be able to get it. It really is one of the great advantages offered by this type of loan. Only loan small amounts With payday loans, you can only borrow relatively small amounts of money, with many payday loan companies putting an upper limit on how much you can borrow. This may not sound like an advantage if you need a large sum of money, but these limits mean that you shouldnt be able to borrow much more money than you can pay back, ensuring that while you still get the money that you need, you arent going to get into hundreds of thousands of pounds worth of debt as part of the process either. Although payday loans have their critics, they can also be seen to have some massive advantages too. If you end up in a pickle and need to borrow money quickly and easily, they give you another option besides having to ask a family member and ensure that you get the money that you need. While many people dislike the idea of taking out a loan, payday loans really are a bit different and can really be a godsend to those that are in need of money quickly.

Short Term Loans

Payday loans are a great solution if you're looking for a quick cash injection, many people use payday loans as they are quicker than obtaining a bank loan.

There are a few reasons why many people use wage advance loans, maybe the person looking to obtain a loan has bad credit and a main stream lender won't lend them the money or friends and family simply don't have a bit of extra cash to lend you.
It is an easy process in order to obtain a loan, you will first need to find a suitable payday loan lender these can be found with a quick search on the internet, make sure you shop around and look for different lenders as most lenders charge different fees but the average charge is around £20 per £100 borrowed.

Once you have located your preferred lender you will then need to fill in a application form this is all done online so it will save you time especially if you need the money in a hurry.

When you have completed the application you will normally receive a phone call from the loan company this will be just a quick check to verify all the information you have input in to your application form. Once this has been checked you can expect the loan amount to be in your bank account within just a few hours.

In order to be eligible to receive a loan there is a criteria which needs to be met.

You must be over the age of 18 and living in the United Kingdom
Must be in employment this can be either part time, full time or self-employed.
You will need to have a bank account that accepts direct debits; this is because the lender will take the money back you owe them via direct debit.

If you have met the above criteria chances are you will be able to get a loan. The only advice I can offer anyone thinking about getting a loan is remember they are designed for short term use only one or two months at the maximum, if you need a longer loan then these types of loans are not best suited to you.

OFFICE OF FAIR TRADING TARGETS PAYDAY LOAN SHARKS

The OFT has told payday loan companies they will lose their licenses unless they stop handing out cash 'irresponsibly' Some 50 payday loan companies, amounting to 90% of the industry, have been given 12 weeks to tighten up their lending practices or face closure. The Office of Fair Trading has also promised to refer the payday lending market to the Competition Commission, after uncovering 'deep-rooted' problems in how lenders compete against one another. The Big Issue has long campaigned against these companies, who lend cash at exorbitant rates of interest to people who are ill-placed to repay the debt. In December, financial expert Martin Lewis, founder of the website moneysavingexpert.com, told our readers they would be better off 'cancelling Christmas' than taking out a pay day loan. Clive Maxwell, OFT Chief Executive, said: 'We have found fundamental problems with the way the payday market works and widespread breaches of the law and regulations, causing misery and hardship for many borrowers. Payday lenders are earning up to half their revenue not from one-off loans, but from rolled over or re-financed deals where unexpected costs can rapidly mount up. 'We are proposing to refer this market to the Competition Commission, which has wider powers to get to the heart of the problems in this market and to identify and impose lasting solutions that protect consumers.’ 'Irresponsible lending is not confined to a few rogue payday lenders - it is a problem across the sector. If we do not see rapid, significant improvements by the 50 lenders we inspected they risk their licences being removed. Payday lending is a top enforcement priority for the OFT.' The OFT have identified the following problems with the payday loans sector: - The targeting of customers with 'limited alternative sources of credit and are frequently in a vulnerable financial position'. In other words, people who have no cash and won't be able to pay back the huge interest. - Huge interest rates that make the problem of 'irresponsible lending particularly acute'. - Using advertising materials that emphasize how easy it is to get a loan rather than the actual cost of taking one out. - Relying heavily on the refinancing of loans, meaning that people borrow more money to pay the cash they already owe. Although the payments are described as one-off short term loans, which cost an average of £25 per £100 for 30 days, up to half of the companies' revenue comes from longer loans which are refinanced. Credit campaigners have praised the OFT’s actions. Michelle Highman, chief executive of Credit Action said: 'The OFT provides detailed guidance on irresponsible lending and debt collection practices – if firms don’t comply with the regulator, they should expect to face the consequences. The industry and its trade associations need to act immediately to address the issues raised.” Financial expert Martin Lewis, founder of the website moneysavingexpert.com, had this warning for anyone thinking of taking out a payday loan: 'You would be better cancelling Christmas than taking out a payday loan. It’s time for the UK to go cold turkey on bad debt. 'Other countries like the US have hardcore regulations. We don’t. It’s easy for irresponsible companies to come here and pump out easy credit. You have debt pimps who have shops out on the high street, trying to entice people to borrow. It’s impulse-driven, which is the genius of how they operate.' 'It’s a wonderful business founded on excellent technology and limited morality. Lenders almost don’t want you to pay them back. They rollover debt so you borrow to pay off loans, sometimes going to another company to pay off the first lender. They don’t put marks on your credit rating, meaning responsible lending is more or less impossible. More and more people borrow £100 and end up owing thousands. I used to say store cards were the devil’s debt, at 30 per cent APR. This is way beyond that.'