Six Reasons To Avoid Payday Loans

By Author: Broad Stevens
Total Articles: 46
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UK instalment payday loans are preferred over other kinds of borrowings since these loans are hassle-free, requires no bulky documentation and the best part is that payday loans does not require credit checks. Applying online is another lucrative feature and some lenders also allow availing payday loans via the handset. This flexibility to avail loans anytime anywhere has its own flip side. However, customers opting for payday loans are supposed to know the following:
1. UK instalment payday loans are high cost, short term loans and one has to read every aspect of repayment prior to opting for payday loans.
2. Certain payday loans lenders UK charge more for a month than credit cards do for one year. The rates of interest may go as high as 200%. For every 100 euros borrowed, the repayment can go as high as 130 euros per month taking the interest charge to 30%.
3. If availing payday loans is a habit, then put a stop at it for once and all. Balance your income and opt out of payday loan spiralling debt circle. Because, payday loan will only increase the borrowing cost but no increase in income.
4. Never ...
... opt for rollover of the payday loan. This is a trap for customers to come back while the lender will have double interest than what he initially promised. The customer who rolls over the credit is required to pay interest upfront on due date and then a fee is charged for rolling over the credit, which adds to the cost of borrowing.
5. Payday loans lenders UK sometimes misuse the ‘debit from account authorisation’ issued by the borrower and sweep into the borrower account much prior to the repayment date making it difficult for the borrower to plan his finances.
6. Customers of payday loans are turned down by mortgage lenders. As per confidential reports, the borrowers of pay day loans are not granted mortgage loan, even though the repayment of payday loan is made on time.
Hence, short term payday loans should not be seen as long term solutions for financial mess. Therefore, in extreme situations, when all other options are exhausted, one should opt for payday loan. And even for payday loans, it is advisable to do some searching around the web. Depending on the location and the state regulations, the payday loan lenders vary the payment amounts and also the periodicity of the loan. If one requires a payday loan but requires more time for repayment, then instalment loan is the right product. This has the features of both payday loan and instalment loan which is secured by post-dated cheques.
Broad Stevens is author of this article. For further details about UK instalment payday loans and Payday loans lenders UK please visit the website.