Payday Loans
What are the mechanics behind payday loans? How do you get one?
Getting a payday loan is effective especially if you need immediate funds to pay bills. This is a short term loan that is expected to be paid in full once the individual gets their salary. One can expect then a 30-day period on the average.
A person can usually get between £80 and £1,000, and this can often be in your account within a day. The requirements are that you must have a job and a bank account.
What are the things you should avoid? I want to know if ever I get one.
In the first place, you should avoid getting a payday loan unless you really need it. Most people who avail of this loan are usually unable to pay it by the due date so they have no choice but to renew it. Do you know how much the APR these loans carry? Well, around 400% or even higher.Originally Posted by Alvin
Quite right. And every time you renew it, there's a certain fee for every, say, £100. Did you know that in the US for example, renewing payday loans has become a $20 billion a year business?
First, understand that there is not such thing as a cheap payday loan, if ever you plan on looking for one. Mark already said that some have APR as high as 400%. In reality, its a lot closer to 520%.
Aside from the high APR, payday loans also carry rather high fees. Its usually 20% of the cash amount. Say you want to borrow £700. Then you would have to pay a fee of about £140. Meaning when you pay the loan when it comes due, you'll need £840 and not the original £700.
Let me correct that. You should get a payday loan when all other avenues fail. I would suggest you borrow from a friend instead.
I've already mentioned the fee right? Don't pay it upfront. Just pay it with your loan.
After reading the posts here, are you sure you still want to apply for one?
Last edited by Daniel Smith; 08-12-2011 at 07:13 PM.
If this was food, I just lost my appetite.
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