Payday loans are both famous and infamous in the UK for a variety of reasons, but they are still very much required, as made evident by the number of people seeking them. As these short-term loans do come with a very high rate of interest, it is better to first understand the circumstances under which taking a payday loan would make financial sense.
When You Need Money Instantly
The first and foremost reason why people take payday loans is the need for quick money. As long as the lender can confirm the details about your employment status and the bank account information provided to them, they will credit the loan amount in just 15 – 60 minutes.
When you need quick money that you just don’t have at that moment, payday loans are the fastest way to get those funds.
When the Lender is Regulated by the FCA
The UK is full of payday lenders and at one point of time, they had put millions of people in permanent debt, making them pay through their noses. Since then, the government has stepped in and brought the situation under control.
This is the reason why, when you are in need of fast cash and the lender is closely regulated by the Financial Conduct Authority (FCA), payday loans can actually be a viable option. Check out LoanPig at https://loanpig.co.uk/ for payday loans that are both authorised and regulated by the FCA, ensuring that they must abide by each and every one of the strict guidelines put in place by the government.
When You Meet the Requirements
Even if you have found an agency with the FCA authorisation and you are truly in need of quick cash, there are certain requirements which the borrower must meet in order to qualify for the loan. They are nominal in nature, but check them out below, just to be sure.
- The person applying for the loan has to be a UK citizen
- The same person must also be 18-years or older
- The applying individual must be in employment with proof of regular paychecks
- An active bank account in the UK is necessary
- Pensioned individuals and those on disability allowance are also eligible
When You are Perfectly Aware of the High Interest Rates
The infamy of the payday loans which we mentioned earlier originally ranged from the fact that the interest rates can become astoundingly high, especially when you miss out on a payment or two.
Before applying for any loan amount, first understand the yearly and APR percentage that the lender will be charging. Also, get to know the penalties involved with missing a payment. Once you have the estimates, sit down and make your own calculations before coming to a decision.
Always remember that the more money you take as a payday loan and the longer you opt to pay off the debt, the more interest you will pay. Keep the loan amounts as small as possible and pay them off as quickly as you can to have the best of both worlds.