Payday Loans and Loan Sharks: Payday Loans Fast

Payday loans can sometimes be an easy target for people who think they are being ripped off, but most of the criticisms aimed at payday loans are unfair and inaccurate.

One such criticism is that payday loans are the same as loan sharks. A loan shark is a criminal lender who gives loans at an illegally high rate of interest and often uses threats and violence to recoup the money.

Payday loans companies are nothing like this. Payday loans are legal and are fully regulated by the office of fair trading. All payday loans must clearly advertise the APR on all their adverts, and all genuine payday loans companies will make it clear exactly how much money you will have to pay back before you take out the loan.

Same Day Payday Loans

If you are find that your wages just don't stretch far enough from time to time, you could consider a fast pay day loan.

Pay day loans are relatively small, short term loans. If you have important bills to pay or you need cash fast, but pay day is a few days away yet, then a fast payday loan could be the answer.

You might also be able to use a pay day loan to help pay for emergency repairs to your home, for example, or an unexpected bill for your car. Maybe you have simply overspent before payday but don't want to miss out on an important social event.

Applying for a pay day loan is quick and easy, and the money can be in your account within an hour.

For every £100 you borrow you will usually be charged around £25 so responsible lending is important. Make sure that you only take a pay day loan that you can afford. Don't forget that come your next pay day you will need to repay the payday loan in full.

Payday loans are often thought of in the same way as loan sharks because the APR on the loans seems very high, often over 1000%, but there is a good explanation for this.

APR stands for Annual Percentage Rate and refers to the amount of interest you will have to pay on your loan per year, but payday loans are not designed to be paid back over a year. They are short term loans which usually have to be paid back within a month, so the APR can be misleading.

A better way to think of it is that you will generally have to pay 25% of the loan amount on top of your repayments, so if you borrow £100 you will have to pay back £125 on your next payday. This is often much cheaper than paying bank charges or late payment fees for example, and can actually save you money in the long run by improving your credit rating.

All decent payday loans companies also encourage responsible lending. If we don't believe you are capable of repaying your loan we will not lend you the money in the first place. Similarly, it is very important that you are aware of just how much money you can afford to pay back before you apply. Making a budget might help.

Payday loans are not long term solutions to serious debt. If you are struggling with debt there are charities and organisations out there that can offer you free and impartial advice.

Whatever you do, never turn to a loan shark. Payday loans are a much better and much safer option.

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