Thursday 2 August 2012

Have You Ever Considered a Pay Day Loans Site, and Should You Use Them?



Now unfortunately we can't all be in a position to stump up hundreds of pounds in cash for unforeseen events beyond our control at very short notice. But, you still need to get to work, or make that trip. So should you use a pay day loan? Is it a con or a legitimate business?

Pay day loan companies

They are actually very real, very legal and have to adhere to rules set by regulatory authorities such as the FSA. So why do some people think they are so scary, typically frowning at their use? Well it probably has something to do with the APR displayed when you see these things advertised.

It is important to remember what they are offering you, it is a short term loan suited to emergency situations where you will be getting paid very soon and can afford to pay it back. So if you do borrow £250 to get your vehicle fixed or boiler repaired and you pay the cash back after a few days, then you will not be charged 2500% on £250, which is £6,250 over 1 year, as you paid it back quickly.

It's a short term emergency situation quick fix. So the APR is so high as it is based on an annual return. So a typical example borrowing £250 and paying back within 5 days would cost you £270. Now, if borrowing that money just saved you a £30 bank charge then it was a wise move.

So I should always consider pay day loans when I need a bit of extra cash?

No, you certainly should not. It is important that you take control of your own finances and use services like these as a last resort. They are a viable solution in an emergency when you have no other way of sourcing funds at such short notice. Then you have to consider if you really need the cash, can it wait? I would strongly advise against anyone thinking it's a good idea to use these services to purchase luxury or non-essential items. But if you do need cash quick for avoiding a bank charge or in any kind of emergency situation then this could be the solution for you.

Pay day loans are only ideal for short term purposes, 1 or 2 months at the maximum. If you are looking for a loan longer than this a wage advance loan is not suited to you.

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