User talk:Louisarmstrong20

PaydayLoans are becoming an increasingly popular alternative to going into unarrange overdrafts with the banks. No matter how careful we are with our money, we can overlook a payment due to come out. Unfortunately sometimes we don't realise until it's too late, and payday might be a couple of weeks away. With no money to cover it you risk falling into an unarranged overdraft which can often be charged by the day can end up very costly indeed.

Thankfully, paydayloans can actually be a cheaper alternative. Paydayloans tend to have a fixed interest rate of around 25%, so say if you were to borrow £100 over a month you would end up repaying around £125. This can be a substantially lower amount than you would have to repay the bank if you fell into an unarranged overdraft.

Another benefit of paydayloans compared to other methods or borrowing such as credit cards or traditional loans is that often they are much quicker because the amount is much smaller and the period of borrowing is much shorter. For example, a decision can generally be made in a matter of minutes online and the loans can often be funded the same day as you apply.

Unfortunately PaydayLoans are surrounded by a lot of controversy but this is mainly because people do not truly understand them, they just see the high APR rates and make a judgement. As mentioned above paydayloans can actually end up saving you money if used correctly. The APR is so high because it is a figure which is calculated on borrowing over a year long period, whereas paydayloans are only designed to be taken out for around a month or less. The actual interest you repay will only infact equate to around 25%, so if you borrowed £100 for a month you'd expect to repay around £125.

The other benefit of paydayloans is that you can generally repay early without any penalty charges, so for example if you borrowed the money and then got paid a bit earlier than normal you could repay the loan early, and possibly even save on some of the interest charges, however this does depend on the company you are borrowing from.

You should always plan ahead when taking out a paydayloan though and remember they should only ever be used an emergency resort, and not for luxuries. This is very important. You must only ever borrow the amount you can repay and you must always remember that you will be starting the following month with less cash than you usually would because you'll have repaid last month's loan along with the interest.