Yes its true, if you are in employment then you can get your hands on a payday cash advance without too much trouble. The thing is though, do you really want to take advantage of this form of credit or should it be consigned to the scrap heap like the infamous logbook loans?
Lets take a look at how they work.
The number of payday cash advance loans seen around town in the last couple of decades has blossomed and actually threatens to outnumber businesses like Starbucks. They are fast, easy to use and almost anyone can qualify for a loan of anywhere from £50 to as much as £1000 and have the money on the next business day. Even if you have the worst credit imaginable it is easy to qualify for a payday cash advance loan.
The question is how can the banks almost go under making bad loans but these businesses manage to not only stay in business but to flourish. The answer is simple. The lender in these instances is not simply giving away unsecured money. There are two main requirements to getting approved for one of these. The first is that you have a verifiable job and your weekly salary is not more than the amount of the loan.
The second requirement is that you have an active bank account. The lender simply puts an attachment for the amount of the loan on your next paycheck, with your bank, and when the check is deposited the amount of the loan comes off the top.
Payday loan companies obviously charge interest on the money they give you in order to make money for their business. The problem is that they charge rates which are astronomical in comparison to those that you might expect from a regular bank. As an example, the company which goes by the name of Payday UK lists the interest rate on its website at 1737%.
The reason people get sucked into these types of bad credit loans is because they only look at the money they need to borrow, and the amount they will have to repay when they get their next paycheck. Repaying £100 when you have borrowed £80 doesn’t seem so bad, but when you think about the fact that you are only getting use of the cash for a couple of weeks you realize its a very expensive proposition.
All this simply means that, like any other financial decision, you have to make some difficult choices. Shop around at the different outlets and do the math. Which one will give you the money you need at the lowest cost to yourself? The object of getting a payday loan is sold to us as being a way to help us out in an immediately serious financial situation.
The problem is that most people who find themselves needing to use a payday cash advance are the very people who are not going to be able to get back on track if they start using them. Many find that they get into a vicious circle where they take out larger loans every month until they get to the point that they don’t have enough in their paycheck to repay their latest fast cash loan.
If you really have no other choice then the least you should do is take the time to find the best rates and use the opportunity to get your financial house in order instead of sinking deeper into debt. Is absolutely essential that anyone who uses one of these instant cash loan products.
