Before you race out a grab the first payday advance loan you can find, take a few minutes to read this article so you know what to look for and what to avoid.
Everyone at some stage has been faced with a financial crisis of sorts. Whether it be due to an unforeseen medical cost, car repairs, or perhaps even a feneral to fund.
Whatever the cause of the money crisis, they are not pleasant and if you are mid way through the month it leaves you in a compromised financial position. This is where payday advanced loans can help, however you want to make sure you get the right one and read the fine print too.
Before you consider using Payday advance loans, it’s advisable to view them in their rightful place, which is a an emergency bail out, and not something that should be
When to Get a Payday Loan?
Obviously companies that lend you payday advanced cash make money off their service, which is perfectly normal and to be expected, however the rate can vary from company to company, so make sure you check this out before committing.
The question you need to ask yourself is for the amount you need will it be more cost effective to let your bank account run into over draft or look into payday advance loans. In most cases payday loans will work out to be better, however you must make sure you pay back the loans within the time frame they give you, otherwise you can end up in a worse situation.
What Will You Pay in Interest for Payday Advance Loans?
What you need to understand is the annual percentage rate or APR that a payday loan company charges, I’ll do an example for you in a moment.
However you also want to check if the company charges compounding interesting on your loan if you can’t make the payment back in the time frame agreed on. If compounding interest is charged you can get yourself into a bad situation, especially if you can’t repay for many months.
OK so let’s look at an example now. If someone was to borrow £ 100s, and the requirement was to pay back £ 115, then this would work out to be 390% APR. However if compounding interest was calculated this would boom to 3,685%.
The important thing to note is that all Payday Advance loan companies are required to tell you what the interest rate will be, however what most people don’t realize is that banks charging you interest on peronal loan or mortage are actually much worse. If someone was to take out a 25 year loan of £10,000, at 10% will mean you pay back over £27,000 pounds in 25 years.
How Much Can You Get?
The most common question asked is, ‘how much can I get’? The answer is somewhere bewteen £250-1500, but it all depends on your salary as this is used as your collateral against the payday advance loan, and the amount you can get is proportional to this.
Keep in mind that not all payday advance loans companies have the same rules for when you must pay the loan back by, most say a week after your next payday but some are more flexible and allow longer.
Just make sure you pay back the loan within the time frame and do not borrow more to pay back what you already owe, as this is where people get themselve into trouble. Unfortunately there are some payday loan companies that encourage you not to pay them back, which is not advisable.
How to Apply for a Payday Advance Loan?
You need to provide proof of ID, and work pay details, most require you to do this by fax or scanning, however one company that is widely used doesn’t require any faxing, which makes things a lot easier, they are Purple Payday, and provide reliable service.
Anyone can apply for an advance payday loan as long as they are over 18 years and can prove that they are employed and earning above the threshold, which is usually about 750 pounds a month.
It’s also much easier to get approved for payday advance loans than traditional bank loans, and usually, if you use a reliable service like Purple Payday you will get the money deposited in your bank account within 24hrs.