Payday loans have changed the UK financial services industry in a way that is unheard of. Statistics show that over 1.2m Brits have used these short term loans at least once, and the growing popularity of these loans mean that they are here to stay. As with all financial services products, there are pros and cons to using payday loans online:
- Payday loans give people access to credit in a way that has been done before. The Consumer Credit Act made it easier for people to find credit without going through a lot of bureaucracy to get there. For complete convenience, payday loans give people credit without stress.
- They make consumers bankable. A payday loan shows up on your credit report. This is excellent news for people who want to improve their credit rating. Paying back your short term loan on time will show other lenders such as mortgage lenders that you can be trusted with their money and resources.
- Payday loans can be applied for online. Most personal loans from the high street require you to go into the branch in order to discuss your account. This aspect of the equation is taken away when you apply for same day loans. Simply sending your application in online will allow you to be cleared for instant cash.
- Interest rates can be high. One feature of loans that borrowers should be aware of is interest rates tend to be higher than high street banks. This is to cover the risk of default of payday loan borrowers. If you know you can afford the loan you are applying for, the interest rate should not have a large effect on your ability to repay it.
- If you don’t keep up with repayments, debts can roll over which can put financial pressure on you.
Top tip: Look at your financial expenses and income each month to assess how much you can borrow and pay off (interest included).