Choosing a payday lender
There are many different factors to consider when choosing a payday lender for your short term cash needs, the main ones being cost and convenience.
Most UK payday lenders will charge between £15 and £30 interest per £100 borrowed every 30 days with the exact amount varying from lender to lender. This is usually in the form of interest repayable with the capital on your next payday although some lenders do also charge a one off ‘admin’ fee for setting up the loan. Make sure to check the total amount repayable before committing to the loan to ensure you are getting the best deal.
Many providers will also allow you to ‘roll over’ the loan on your next payday with the option of just paying the interest or paying some of the capital and interest. If you need money for longer than one month then you are probably better finding another source of finance as taking payday loans out for more than one month can make the costs mount up very quickly due to the high APR.
One of the main selling points of payday loans and the reason the usage has massively increased in the UK over the last few years is the hassle free application the speed of the deposit into your bank. With some lenders the money can be deposited into your account within the hour!
The majority of lenders will take some basic details through an online application form and give you an instant decision within around 30 seconds. Providing you are accepted the money is deposited into your account using the account number and sort code provided during your application. The money is then usually taken back off your debit card on the day you specified as your payday on the loan application form. Taking the money back off your debt card makes things simpler as there is no need to set up a standing order as would be done with a normal personal loan.
In summary payday loans can be an excellent option for fast access to money when you need it in an emergency although there are more cost effective options available if you require to borrow over the longer term.