Payday Advances cover you until Payday

Companies which loan payday advances to people ahead of payday are becoming increasingly common and the reason is that there is presently a huge demand for it in the UK.

The effects of the recession are still hitting UK wallets hard. If you have ever been caught short before payday and needed some extra cash then you will understand.

Fast and Simple Payday Advances

The way in which payday loan providers operate is incredibly simple. Instead of waiting until someone gets paid, they can borrow an amount (usually up to £750) and pay it back to the company with interest the day their salary reaches their bank account.

Usually borrowers have to fulfil some simple eligibility criteria. For example, most lenders require a customer to be a permanent UK resident with a permanent job; be paid monthly so that the payday loans can be repaid on a set date and earn over a certain amount, (usually at least £750 a month).

Borrowers are also expected to be over 18 years old and able to promise to repay the loan, in full with interest on the day they get paid. Other than that there are not, usually, many other stipulations.

Applying for Payday Loans

The application process for a payday loan is fast and simple.

In order to loan payday funds to a borrower, a company checks their credit report to confirm their identity and their official address but they do not usually take into account whether the customer's credit rating is high or low.

If you've had trouble getting loans from high street banks you'll find that payday loans are much more straightforward. All payday loan companies normally care about is whether or not a borrower can commit to paying them back on time.

Arguably one of the reasons they are less picky than other lenders is because of the extremely short term period for a payday loan which is ordinarily less than one calendar month and can even be as short as one week.

After all, payday loans are intended to help people to access cash before their payday and it is a requirement that borrowers are paid monthly so the loan term is naturally short.

Payday Loans and APR

Because companies who loan payday funds are only lending people money for a few weeks they charge higher rates of interest.

Whilst a conventional lender can rake in interest over a longer term such as a year or even several years in the case of a credit card, payday loan companies might only have a customer for two weeks of their entire life and so a higher interest rate applies to ensure a decent return and to cover administrative costs.

In cases where people are not great at managing their finances, payday loans can work out to be a cheaper lending option than mainstream loans and credit cards because they are paid back instantly on the person's payday and there is no temptation to extend the loan for longer, paying more interest or racking up further debt.

If you've got more questions about payday loans our FAQ page could have the answers.

However, it's always a good idea to plan ahead and work out a simple personal budget to ensure you get the most out of a payday loan

Another reason that payday loan companies might charge more interest is that they are more willing to take on customers with poor credit ratings so there is more 'financial risk' involved.

Apply today for Payday Loans up to £1000 with My Payday

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