Payday loans are readily available in the United Kingdom. Borrowing a few hundred pounds has never been easier. Private lenders based all across the country are offering payday loans to people regardless of their credit score. The borrowers should have an income, whether from employment or business, and they should be able to repay the loan on the next payday. Many lenders are now offering payday loans that can be repaid over a period of time. While payday loans were not originally intended to be installment loans, they have turned out to be so owing to the demands of borrowers and also because lenders have expanded their propositions.
Most people opting for payday loans are in haste. This is partly because they have a financial emergency. There is also the fact that payday loans are processed quickly and are usually available on the same day. Some lenders can process an application, approve the loan and credit the amount into the back account in a few hours. This further makes the process hastier than it has to be. All the haste leads to omission and a serious error can turn out to be costly for a borrower. As a borrower, you should always be meticulous with all kinds of debts, especially payday loans since they come with a staggeringly high rate of interest.
Payday loans are unsecured. They have some of the highest annual percentage rates. Whether you are choosing a month as your repayment term or you are settling for installments over a period of twelve months, you have to pay a substantial interest on the loan. If you do not calculate the interest and ascertain your affordability to repay the installments or the lump sum the very next month, then you are in trouble.
If the term is of one month, then you should be able to pay the entire loan amount along with interest from your next paycheck. If you have installments, then you should know that the interest will be much greater due to the cumulative effect. The interest will be charged for many more months and hence the total debt will be more. Your monthly installments may reduce for the same loan amount but your overall liability will increase. This does not mean repaying payday loans in one month is easier. Moderate sums need to be repaid in installments. Only small loans of a hundred or less than five hundred can be considered for one lump sum repayment.
Payday loans have agreements. There will be many other terms than just the basics. There will be provisions for late payment fines and other charges. Not all lenders charge a processing fee but some do. You must be familiar with these terms. Haste will lead you to simply sign the agreement, just as internet users accept terms of use, privacy policy and other service agreements on websites. There is no going back after you have taken a loan so exercise caution, be meticulous with your assessment of payday loans and their lenders, read all the terms and make an informed choice.