Payday loans becoming more popular what hard up borrowers
In the past many people that were hard up and needed to raise some extra cash opted for a credit card or a loan. However, for many consumers these lines have credit have dried up over recent months, with the global credit crunch resulting in far tighter credit conditions that have left many would be borrowers out in the cold. This means that many have had to seek other ways of raising money, and this is reflected in figures that show an increase in the take up of payday loans.
Recently a major doorstep lender reported an increase in business since the start of this year, showing how many consumers have turned to doorstep lenders. And now figures relating to payday loan have shown that there has been a 55% increase in the take up of these loans, with some people opting for them despite their high APR levels because no credit check is carried out.
The amount that can be borrowed by way of a payday loan is restricted, with the limit usually at around £1000, although the exact amount available to borrow is based on your financial and employment situation. The loan is usually made for a short period of thirty days, with the idea being that you repay the loan once you have been paid. However, in some cases you can roll the loan over for a further month as long as you pay the associated fees.
The charges on payday loans can be quite high, and if you are taking out these loans regularly then you may need to take a look at your financial situation. One industry official said: “Are you paying out more than you get in each month? If you are, then you need debt advice, to see where you can make cutbacks. You may need to negotiate smaller payments with your creditors…or your mortgage lender.”
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Payday loans are fast taking over from the more conventional cheque cashing outlets where a customer needs to visit a cheque cashing store and physic ally hand over a cheque.
Payday loan companies are easily accessible and their application processes are straight forward and only take minutes. Granted, the APR is higher than most other opportunities but because of the ease of access and anonymity, no need to call in to a high street store and the fact that the loan itself is short term most people find them an attractive substitute to other avenues.
As long as the payday loan is used correctly by paying it back on time and not rolling the loan over until the next payday they can be quite useful for those unexpected bills.
Here’s a list of payday loan companies I found, it also includes some other useful information too.