A recent report compiled by Consumer Focus has found that the amount of people using payday loans has quadrupled in the last 4 years.  The reason for this is thought to be the recent credit crunch, which has limited the amount of money people have had to play with, thereby increasing cash flow problems.

Payday loans available when you need money most

This coincides with a call from some groups for payday loans to be regulated more so that the charges are not so high.  If charges were too high, however, then the obvious question is why have so many people taken out the loans.  The answer is that in fact charges are not too high.  In fact, payday loans are one of the cheapest ways to borrow money.  Short term loans from banks come in the form of an overdraft, and if that is utilized without being agreed with the bank first then the charges are much higher than for payday loans.  And with much of the need for payday loans coming from unforeseen emergencies which have arisen, there is often not enough time for people to organize an overdraft with their bank.  At Payday Loans UK we will transfer the money to your account on the same day as the application, assuming that the loan is approved.  The charge for the loan is also not only less than overdraft charges, but in terms of the amount that has to be paid back almost certainly less than a bank loan taken out over many months or years.

As has been addressed numerous times on this blog, and elsewhere on the site, the reason that it seems as if payday loans are unreasonable is by looking at the high APR.  But the loans are not supposed to be paid back over a year or anywhere close to that, they are supposed to be paid back with your next paycheque.  The groups that are complaining about payday loans, if you look at the arguments carefully, are not actually complaining about the loans as such.  They can’t because there is nothing wrong with them.  The complaint is that some of the people taking out the loans do not understand what they are doing.  In other words, these groups want to prevent people from taking out loans because they may not understand it.  At Payday Loans UK we especially are very careful to present all the information for everyone so that they know what the loan is they are taking out.  We even present the APR, even though it won’t be relevant if the loan is paid back on time.

These groups also point out that it is mainly people on low incomes who take out payday loans.  Well, it is mainly people on low income who don’t have a lot of savings they can dip into when an emergency situation comes around that they need money for immediately.  Nobody takes out a loan when they already have all the money they need.  The point is that payday loans are more popular now, and not because, as certain groups trying to “protect” people on low income suggest, because people have become more stupid but because people have less money, less savings, and are more need of a loan in emergency situations.  If you are one of these people, then you can be sure that a payday loan will cost less than entering into an unauthorized overdraft.  As long as you have a permanent job which pays monthly above a certain level, we are happy to help.

Tags: APR, bank loans, Best Payday Loan Lenders, Cheapest Payday Loans, emergency cash, Payday Loan News, Payday Loans UK

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Ken Heading keeps up to date with all the financial news in the UK, particularly as it affects payday loans, and enjoys writing on this subject.

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