Payday Loans – A Saviour in Disguise?

Feeling the financial pinch. Again!Last month, I found myself to have completely maxed out my over draft by the second week. I like to think this was through no fault of my own. After all, I had paid off my well deserved holiday to the South of France and had my car insurance renewal had been sprung on me as if out of nowhere! Unfortunately there was no way I could live to the end of the month and I wasn’t willing to resort back to my student days and live on a diet of super noodles for 2 weeks. I must admit I started to panic and wasn’t too sure how I was going to find some extra cash to get me through the month.After doing a little research it was clear that millions of people find themselves in this position and like me, their predicament was far too short term to go to the bank for a loan. Extending your overdraft isn’t always an option and savings are at an all time low given the current economical climate. So what options are you left with?Are Payday Loans A Scam?Of course I had heard about payday loans and cash advances although I remained very sceptical! Rumours of scams and unthinkable interest rates meant that I had never entertained the idea for very long. Most of these loans are advertised as unsecured and with no credit checks which made me think there must be a catch. Running out of time I investigated a few of these seemingly popular online sites.High Interest RatesFirst things first, the interest rates are high. To borrow about £100 will usually cost you £25 or thereabouts in interest. This sounds steep but when I thought about it for a bit longer it wasn’t so unreasonable. I had already been charged £38 in bank charges because my phone bill had bounced and I was panicking that I’d be stung with these again when my gym membership came out. A £25 interest fee suddenly seemed like a drop in the ocean in comparison to Natwest taking £38 every time I was short on cash!RequirementsImportant things to be aware of are that there are a few requirements. You must have a job so you can repay these short term loans when you receive your next pay check and you must have a debit card that the repayment will come out of. There really are no credit checks so you don’t have to worry about a poor credit history.So what’s the attraction? What is actually really quite attractive about these high interest short term loans is the ease. You don’t have to go into a bank on your lunch hour or wait for post to be sent. These payday loans are done completely online and in many cases the cash is available for you the next day. Another thing I wasn’t aware of is how many of these short term loan websites there were. By typing in a phrase such as “loan to get me to payday” or “payday loans” search engines will return a massive selection. Then there is usually a short form to fill in and surprisingly, that really is all you have to do. Once these sites receive your request they find a suitable lender and deposit the requested amount into the bank account you put on the form.So my brush with financial catastrophe ended up being much briefer than I expected. And although I begrudged paying the £40 interest to borrow £200 it was definitely worth it so I didn’t have to make the dreaded call to mum and dad. In fact, it was a small fee in comparison to the label of “financially incapable” being stuck to me for the rest of my life.A little bit of adviceA little word of warning though before you decide this is the solution to all your problems. While these sites aren’t out to scam you they are a last resort. If you have bills coming out of an account or are likely to be charged for bounced cheques then this is definitely a cheaper solution. However, if you really wanted a new outfit for Saturday night I would probably advise you to wait until next month for it!

This entry was posted in Online payday loan. Bookmark the permalink.