Payday loans are loans that are generally easy to acquire and quick in processing, where the borrower receives the loan amount in their checking account within two days of approval. Payday loans are quite popular in the UK for various reasons, the most common of which is to address financial needs that require immediate attention.
However, there are drawbacks to payday loans, and the most evident is the high interest rate that is charged on the loans. Also, some lenders may charge associated fees and costs that may be considered as ‘hidden costs’ (in case the lender has not clearly informed you about them). Hence, it is wise to evaluate different payday loans before choosing one. Here are 5 tips that can help you make the right decision.
- Look for A Reliable Payday Loans Comparing Website
You can actually end up saving a good amount of money by comparing and analyzing different payday loans that you are eligible for. As lenders charge different interest rates and have varying terms and conditions, it is always better to use websites that allow you to compare payday loans. Such websites are the most trusted sources for comparing payday loans in the UK.
- The Annual Percentage Rate (APR) Charged
APR can be quite confusing in payday loans. Since APR is for the Annual Percentage Rate, it does not reflect its true amount when it comes to payday loans, which are to be repaid within 30 days. The best thing to do here is to evaluate the amount you are borrowing over the number of days you have the loan. So a good lender will provide you with the exact amount that will be charged as APR.
- Using Faster Payment
Yes, some lenders may charge you with associated fees for providing you the loan amount within the same day or within one hour. That being said, there are lenders who will not charge you a penny for processing the payment faster. It’s another reason why you should always assess the payday loans provided by different lenders.
- Working with Brokers
One must always be careful when working with brokers. Some brokers may charge you a fee to guarantee the loan on your checking account. It is worth knowing that many lenders have approved brokers who do not charge any fee from you for helping you get a payday loan as the lender will compensate them with commission. Knowing this could help you avoid spending up to £100 on brokers.
- No Credit Check Payday Loans
Yes, you can acquire payday loans with no credit checks, but there is a catch. Notice that all lenders who are providing payday loans with no credit checks or with bad credit charge a higher rate of interest as compared to those that check your credit rating.
Hopefully these tips will help you acquire the right payday loan!