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Payday loans regularly hit the national press as people tally up horrendous debt and get themselves into a debt crisis through borrowing irresponsibly with payday lenders who take advantage of people who find themselves in a vulnerable situation. While payday loans have, as of January 2015, been capped, you could still end up paying a payday lender back double the sum that you initially borrowed.
Money Pug wants to help you find a solution to your financial problems, whatever they may be. A payday lender, who provides a borrower with a small sum at an incredibly high interest rate, will usually not be the best answer. This is one of the most costly ways to borrow money, and so no matter how dire things may seem, it is rarely a good idea to resort to borrowing of this kind.
If you are struggling to make ends meet, Citizen’s Advice, and certain charities, can offer free debt advice and help you to find an answer to your problems. Money Pug’s guides could also help – so surf this website to find out more about reducing your outgoings, and dealing with debt.
Why Do People Take Out Payday Loans?
While, as mentioned above, Payday lenders should not be the first port of call, and should only ever, if at all, be viewed as a last resort, people will still choose to borrow in this way. Payday loans can seem attractive because they offer:
Easy access to funds (often just minutes from initial application).
Lax credit checks (making it easier for those with very poor credit history to get access to funds.)
Rollover payments (which seem to offer more time to repay, but which actually incur even higher levels of interest payments).
The Dangers of Payday Loans
In spite of the fact that they seem speedy and convenient, taking out a Payday loan can be dangerous due to the extortionate interest rates, which could see you paying back double what you borrow. Sneaky terms and conditions mean that it can be easy for borrowers in a panic to be caught out. What is more, when you take out a payday loan, it will show up on your credit records and could make it more difficult to borrow in the future. It could also make it more difficult for you to purchase a home if you wish to do so in the future.
Those in financial difficulties may be tempted to take out more loans to cover previous loans that they cannot service. Do not ever do so. There is free advice available to help you get out of a debt crisis, and there may be things that you can do to save money and reduce outgoings, or increase income, in order to make ends meet. Do not panic. No matter how bad things seem, there is always a solution… that solution is very unlikely to involve a Payday lender.
Payday Lender FAQs
Payday Lenders FAQs
Payday loans are designed to give you cash quickly in an emergency. You could be able to borrow between £50 and £2,500 and pay it off over several months or in one lump sum, depending on your choices and the length of the loan. Lenders design the loan terms to be short, but most will let you extend your repayment date by an extra month, which will give you more time to pay it back but will, of course, increase the interest that you will have to pay.
Who do we include in MoneyPugs Payday Loans comparison?
We include every UK Payday Loan you get in the UK from our panel of providers. . They are all either directly regulated by the Financial Conduct Authority. or providers that are partnered with a company regulated by the FCA.