Instant loans are a real lifesaver for some people. At the end of the month, money is always tight. Sometimes, you even need money to buy food and to cover essentials. You may be able to borrow from friends and family but most of the time, they are in the same condition that you are! Banks are reluctant to lend money for a short term and they usually ask for a ton of paperwork. In these difficult times, finding someone who will lend you any money is a literal savior.
Why are payday loans so popular?
For that reason, payday loans are very popular. Payday loans get sanctioned right away, the loan is for a short period of time and the money is debited to your account almost right away. You don’t have to worry about the interest rate as you know that you will be paying it back right away when you get your salary. As a result, payday lenders have now become the primary choice for small term borrowers in the UK. The innovative service, rapid dispersal of funds and quick repayment times mean that payday loans are becoming more popular than credit cards. This is also proved by local statistics. In the year 2011, more than 1 million credit cards were cancelled as the average UK household started cutting down on expenses. A survey carried out by PricewaterhouseCoopers also showed that credit card borrowing fell at a record rate as compared to the average hike in consumers taking on instant loans. Payday loan companies are now recognized as the primary source of lending in the UK and they are very popular due to the simple application process, easy repayment and the option to roll over the loan in case of payment difficulties.
What to look for in a good instant loan company?
Now that you know that payday loan or instant loan companies are legitimate enterprises, here is how you can choose a company for your borrowing needs:
- Make sure that the company as a consumer credit license from the Office of Fair Trading. If you have problems with the site, you can always complain to the office and they will help you out. However, a license means that the company will follow legitimate rules and regulations for consumer lending.
- Verify that the site is based in the UK and it is a member of the Finance and Leasing Association of UK
- Find out the reputation of the company by Googling about it online. Read all the reviews but make your own decision. Remember that it’s not really possible to satisfy every customer and a few negative reviews are possible.
- The site should tell you about their interest rate and the amount you have to pay back on the due date. This has to be told to you before the loan is approved so that you know how much you will eventually pay. Average APR rates may range to about 4214% more or less.
The loan has to be paid back in about a month to 32 days. Most companies are also willing to work with you to ensure that you pay off the loan. However, if you cannot pay back the loan on the specified date, you can ask for a rollover to the next date. This will accrue interest but it’s far better than being registered as a defaulter.