Cash Loans & Payday Advance in Press

Payday loans and cash advance loans have come under a lot of fire in the press, particularly the financial pages, for having extremely high APR's and for leading vulnerable customers into financial difficulty. Part of the problem, however, lies within the wider banking and loans industry, which as a whole has come under criticism for irresponsible lending practices -for example with regards to the subprime mortgage industry and with personal loan allowances far exceeding customer's repayment abilities.

Payday Advance - A Better Short Term Loan

It's true that short term Payday Advance have extremely high APR's - around 2000%, compared to around 16% for an average credit card, 30% for a storecard and around 8% for a competitive personal loan. However there are key differences with payday loans - firstly, they are only provided for a month at a time, rather than on an annual repayment basis - so the sum repaid never gets out of hand. The other thing is that payday loans are generally charged as a flat fee, around £25 per every £100 that you borrow, and that includes all admin fees and charges. The repayment is proportionally high, but payday loans are cleared within the month, at your next payday advance, and then the obligation is cleared. In this way, payday loans are a viable option to long term personal loans, overdrafts and credit cards - which might often just require a relatively small monthly minimum payment, all the while building up compound interest over a very long period of time.

Payday Advance Needs Eligible Lenders

It's also true that payday loans don't generally tend to use credit agreements, but rather rely on current ability to pay - using a salary slip from the customer as evidence of their impending paycheque, and companies use this to base their decisions on whether to loan or not. Payday loans will also often start with an initial smaller loan, say around £200, and then the customer can build up a 'trust rating' with the company and be allowed to borrow larger sums in future, when they've demonstrated their ability to repay according to the terms of the agreement. Same Day Loans providers don't prey on vulnerable people, however, they only lend money to people who can demonstrably prove their ability to repay the cash advance at payday - the loans aren't available for self-employed or unemployed people, as they can't prove their ability to repay the Payday Advance within the thirty day contract period. This is in the customer's best interests as well as the payday loans provider, as otherwise the collections process can become difficult, protracted and result in legal action if the agreement is unfulfilled according to its terms.

So for any person thinking about taking out a cash advance or short term payday loan, its worth doing your research first - most loan providers have full Q&A pages on the site with all the questions you may want to ask.

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