Payday Loans: a Little Help When you Need it

By: J Tillotson

Question - when is a high interest, high-repayment loan a good idea? Answer - when it's a payday loan.

No, this isn't a joke. If you're one of the thousands of UK workers on a monthly salary, a payday loan can quite literally get you out of a financial fix mid-month.

It probably sounds familiar. You've had an unexpected bill crop up which you may not have budgeted for in your last month's wage, or the car tax is due, or you've needed to get something repaired. It's impossible to plan for every eventuality, which is where payday loans come into their own.

Payday loans are basically loans of a small amount, usually ?100 to ?800, which are paid off in one or two repayments. They incur high interest charges, around ?25-?30 for every ?100 borrowed, and the repayments are automatically taken via direct debit from your bank account on your next payday.

Because of these high interest charges, payday loans shouldn't be used as a regular thing, but they are handy if you just need a cash boost one month to pay something unexpected. There are many companies around who specialise in this type of loan, and best of all, there are no credit checks. All that's required is a bank account with direct debit facility, and a job. You tell the company how much you wish to borrow, give them your bank details and the date of your next payday, and within 72 hours the money will be in your bank.

You will need to register with a company the first time you apply, and some require proof of employment, but once you've repaid your first loan you can take out another almost instantly.

Payday Loans
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