A payday loan is a quick and easy way to get a cash loan and, some lenders will deposit the cash in to your account the same day, if you apply before 5pm.
So lets look at what exactly a payday Loan is. Well, the clue is in the name, "payday."
A client will borrow an amount of money, usually up to £1,000 with the intention of paying it back, together with the lenders fee and interest charges on "payday". So this is a very short term loan.
The application for the loan is completed on-line, so there is no face to face interview to go through and no phone call enquiries to endure.
Because there's no need to talk to anyone or to explain what the money is to be used for, or why you need the quick injection of cash, any possible embarrassment has been removed from the application process, and the service is becoming increasingly more popular because no one will make a judgment about you or your financial circumstances.
The money can be used for any purpose, but do bear in mind that the loan, plus interest and fees must be repaid on your "payday" So when we say the money can be used for any purpose, the loan should be regarded as emergency cash for that one off, unexpected expense, such as a car repair, boiler repair, emergency dental treatment or something of that nature.
It is not recommended that the cash be used for everyday living expenses as this would suggest that you are living beyond your means (spending more than you are earning) and may be you should be considering other alternatives such as reducing your living expenses, increasing your income or seeking debt advice from an independent source such as Citizens Advice Bureau.
Using the cash loan to supplement your everyday living expenses could mean that you do not pay the loan back on time and then the debt could spiral out of control.
Anyone over the age of 18 can apply for a payday loan providing they have a regular income. Different lenders will have differing criteria regarding what they consider to be a regular income, but most will lend to employed clients and some specialized lenders will lend to clients in receipt of benefits. Self employed clients may also be considered by some lenders.
Interest rates and fees will also vary, but you can expect to pay high interest rates on the cash, in comparison to what may be available at high street banks or other lenders. But unless you have a good credit record and can get a quick overdraft arranged, the chances of the bank entertaining the idea of giving you a small, short term loan are minimal.
When you take out a payday loan you are agreeing to the terms and conditions of the lender, so do ensure you understand what those terms and conditions are.
So the payday Loan companies have spotted a gap in the market and now provide a service that over 1.9 million people have taken advantage of.