When you need money fast and you are able to pay it back almost as quickly, payday loans are the best alternative out there.  Banks rarely offer short term loans, at least not in the traditional sense.  A bank may give you a loan over a matter of months, and with an APR in its teens making it look cheap.  The reality, however, is that if you have to pay it back over a long period of time, you will actually end up paying back more than if you take out a payday loan with a higher APR.

Unauthorised overdrafts cost more than payday loans

And that is just traditional loans.  Now, if you look at the bank’s version of a short term loan, payday loans are even more attractive.  People often take out short term loans because they have a sudden and unexpected need for more money.  A short term loan is there to tide you over until you are next paid.  This is what a “payday” loan refers to.  Banks usually allow you to take out an unauthorised overdraft.  It will have to be unauthorised because a planned overdraft would presumably take too long to set up.  The charges for taking out this overdraft are often quite extreme.

For example, a loan of £200 would cost £50 with Payday Loans UK, that is, you would have to pay back £250.  If you compare that to typical unauthorised overdrafts taken out with banks, they can cost up to £50 every 2 days!  They charge a daily fee as well as a monthly fee, and interest rates on top of that.  Payday loans therefore plug a very big hole in the market with low cost loans over short time frames.

If you are looking to avoid bank charges therefore, payday loans are a very good option.  Banks do not offer a good source of emergency cash.  At Payday Loans UK, you will be approved provided that you are approved, which you will be if you are over 18 years of age, are in permanent employment earning at least £750 net a month, have a debit card linked to a valid bank account and are paid monthly.  Those are the only stipulations, and they are there to ensure that you are able to repay the loan that you are taking out.  There is no credit check because it is such a short term loan.  And if you need any incentive to pay the loan back when you are supposed to, then take a look at the APR.  If you intend to pay it back on time, then look at the actual interest you will be paying, and see that it is actually better than a bank loan.

If you do need money quickly, and you don’t want to go into overdraft, then take out a payday loan.  You will get the money on the same day that you apply assuming that you qualify, and it will end up costing a lot less.

Tags: bank charges, bank loans, emergency cash, overdraft fees, Payday Loans, Payday Loans UK, short term loan

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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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