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Representative example: Borrowing: £1,200 Interest: 0.34% per day for up to 75 days (124% per annum, variable) Representative: 49.7% APR (variable)
Payday loans in the UK are essentially short-term loans that are repaid once every payday. These loans typically don’t go over several thousand pounds and are meant to help workers obtain loans on short notice; such as when there’s a sudden accident or a circumstance that money is dire, and is required immediately.
These payday loans are meant to aid a worker’s financial situation in the fastest and most reliable way possible, and usually are to be paid back within 1-2 months, however, it can be extended according to your current needs.
Pro 1: Fast & Easy
So long as you meet the requirements and are a suitable candidate, you can expect to receive your cash in a matter of hours from some lenders. Payday loans in the UK usually don’t have a strict criteria for acceptance in comparison to other lenders and therefore are generally much more accessible.
Pro 2: Widely Accessible
Payday loans in the UK typically have fewer requirements in comparison to other types of loans, and some, including lenders on NowLoan’s panel, even accept those who have bad credit ratings.
These loans also tend to accept workers as long as they hit the bare minimum requirements, and have been made accessible with 100% free applications.
Pro 3: Unsecured Loans
Secured loans refer to a loan that is tied to an asset, therefore, if the loan is unable to be paid in full, the asset will be liquidated/sold, to make up for the cost of the loan.
UK payday loans are unsecured and don’t require the security of any asset. Meaning you can seek better methods of retrieving the money if you’re unable to pay back the loan, instead of having to sell your treasured assets.
Con 1: More Expensive
Payday loans usually are of higher interest rates, due to the availability and speed of the loan. Therefore, you should only utilize payday loans if you’re well aware of the interest rates you’ll be required to pay. However, there are still options such as paying monthly instalments, to help you slowly pay back the funds.
Con 2: Might Be Carried Onto Next Month
Several workers, especially those who live within lower-income families experience more trouble paying back their loans. Some have trouble getting out of the debt cycle and paying back their loans; which equates to having to move their loan on to next month, and so forth. The best way to not get stuck in this cycle is to only use payday loans if required, and plan to repay the loan as fast as possible.
Eligibility for payday loans in the UK heavily varies, but strictly require certain criteria that you must meet, which are:
These are the bare minimum requirements for getting a payday loan in the UK, but may still vary from person to person, according to their current financial situation, workplace, income, and more.