If you need cash quickly and your next paycheck is still a week or two away, a payday loan could be the answer. Payday loans are short-term loans that give you the money you need until you get paid again. Payday loans are also called cash advance loans or loans against a check. If you need money before your next paycheck, this guide can help you decide if you should get a payday loan.
How much money can I get?
You can usually only borrow a small amount of money because the loan is for a short period of time and you can get it quickly. Most of the time, the amount is between GBP50 and GBP400. You can get a loan by writing a personal check for a certain amount of money plus the fees. The lender will then give you the cash. The lender will hold on to the check until your next payday. If your situation has improved by then, the lender will cash the check. If you still can't pay, you can pay more fees to keep the check held for a few more weeks.
What are the good and bad things about it?
The best thing about payday loans is that you can get the money you need quickly. This can help you get out of a tough financial situation. People with bad credit who have trouble getting other loans or credit cards can also use the loans. The loans are good if you can pay back the money when you get paid in a few weeks.
The biggest problem with payday loans is that they have high fees. Most of the time, you will have to pay at least 10% of the cost of what you borrow. So, if you borrow 100 GBP, it will cost you 110 GBP, or even more if you keep extending the loan. You can also get stuck in a cycle where you run out of money each month because you have to pay back the first loan. You should only take out a payday loan as a last resort or if you know that this month is an exception and you'll be back on track next month.
What else could you do?
Payday loans aren't the only way to get money, especially if you have good credit. You could buy what you need with a credit card and pay it off when you get paid again. Even though interest rates on credit cards are pretty high, if you know it will take you longer than a few weeks to pay back the amount, this interest is cheaper than the interest on a payday loan. If you need help with debts or money for a longer period of time, a personal loan might be a better choice, as long as you can pay it back. If you have bad credit, a payday loan is often the best choice because lenders don't check your credit. Your current employer is the only thing that needs to be checked.
If you don't have enough money to make it to the end of the month, you might want to look into payday loans as a way to ease your short-term financial stress. But you should only borrow as much as you can pay back next month and still have enough money to last until your next paycheck.
