5 Things You Didn’t Know About Payday Loans

Cash till payday loans were introduced to the UK in 2006 and ever since then, their popularity has rocked, which is quantified by the fact that the industry is now worth £1.7 billion.  The premise of payday loans is that they are a short term loan for a period of between 15 and 31 days, for a relatively small amount of money between £50 and £1000.  The borrower can apply for the loan online or via a retail outlet and the decision should be made regarding acceptance of the loan, and the cash should be deposited into your account with 24 hours.   To understand the product further, have a look at the following five things you didn’t know about payday loans.

They can improve your credit rating

Believe it or not cash till payday loans can improve your credit rating.  This is because accessing a loan leaves a credit footprint on your credit report, therefore if you repay the loan on time and in full, it will be recorded and will consequently improve your credit score as you have proven that you can manage your debt efficiently.

There is often a fixed fee for the first month

There is a lot of press around the high rates of APR for a payday loan.  However most of the competitive lenders offer a loan for the first month with a fixed fee of £25 for every £100 you borrow.  Therefore you actually avoid the high interest rates.

You can postpone the repayment

The nature of payday loans means that you can postpone the repayment at the end of the month if you need to.  Of course this will incur another month’s interest (at the rate of APR), however the ‘rollover’ facility is there if you so require for as many times as you wish.

You can apply for one despite a poor credit rating

Cash till payday loans are the only type of loan that you can access if you have bad credit.  This is because payday lenders have a more lenient attitude towards bad credit history than other types of lenders.

The most common reason for using a payday loan is for essential monthly costs

There has been research into the industry following its popularity and this has identified that the most common reason cited for accessing a payday loan is to help meet monthly costs like utility bills, food bills etc.