The cost of living in the United Kingdom has gone up while salaries have remained the same resulting in people’s difficulty in making both ends meet. Many people have experienced being short on cash a few days before the next payday. Aside from scrimping having to stretch the budget, it has become almost impossible to save for future emergencies such as hospitalisation after an accident, payment for an urgent house or car repairs, utility bills, and other long-overdue debts. Borrowing from relatives and friends has become complicated with people experiencing the same difficulties. The availability of payday loans has offered a solution to people’s dire needs.
Aside from being a quick and easy way of resolving financial issues, a payday loan has the following benefits.
Applicants with Bad Credit Can Get Approval
People with no credit history or with a history of default payments may find difficult to get approval for loans in banks and other financing companies. However, payday loans do not require a good credit score. As long as you have a stable job, the lender can collect from your salary. A payday loan is a short term, making it less risky for lending firms.
Processing of payday loan can take a few hours because of fewer requirements to check. You only need proof of employment, payslips, and proof of identity, which most borrowers already have. You can expect to have the funds in your bank account the same day that you submit your application.
Another benefit of a payday loan is the easy repayment scheme that borrowers can do online. You do not have to commute to the lender’s place during your due dates. Some firms would ask to withdraw payments directly from the borrower’s bank account for convenience.
Advance Payments Can Reduce Total Amount Due
Unlike other types of loans wherein borrowers cannot pay in advance, payday lenders allow borrowers to make advance payments if they want to have low interest. As a result, there is a reduction in the total cost of the loan.
Getting payday loans to pay an old debt that incurs high interest is one way of saving money. An overdue credit card payment or overdraft can cost creditors in terms of penalties and annual interest percentage. Borrowing an amount to pay off these debts would stop the penalties and other charges.
For example, late payment penalties for a credit card can amount to £25 a month while the overdraft can amount to £20. If you take £100 payday loan and pay your credit card and overdraft, you would stop worrying about the penalties while paying less APR on your loan.
Short Repayment Period
The repayment period dramatically affects the cost of the loan because you would be paying the APR throughout the life of the loan. A 25-year loan would cost more than a 6-month loan. Aside from the monetary cost, payday loans would mean less stress when a payment is due.
Accessible at All Times
As long as you have access to the internet, you can apply for a loan anytime you get short of cash, including during weekends. You can also make payments any time of day or night, saving you from delayed payment charges.
In the UK, the Financial Conduct Authority serves as a watchdog for erring lenders. The agency also regulates the annual percentage rate and the terms and conditions of credits. Borrowers would never have to suffer from high APR or unlawful penalties and charges,
The next time you need cash immediately, consider applying for a payday loan. Application is easy, and processing is quick. You would also enjoy some benefits that you cannot enjoy with other types of loans.