Payday Loans are designed for easy and quick access to credit (often the same, or next day), and are sometimes used by people who are not, in conventional terms, considered creditworthy. These loans are short-term, and due to the high risk involved by lenders, they come at very high interest rates. In fact on an annual basis they would work out at anything from 1000% APR to over 2000% APR.

Those who offer payday loans have simple criteria for all applicants. These are usually:

* Applicants must be aged 18 or over (the legal minimum for taking out a contract)

* Minimum income, around £300 per month

* Must have a bank debit card

* UK resident

Most payday loans range between around £75 - £1000 but this can vary.

Loans are usually expected to be paid back-with interest-after around 31 days.

I always wondered why are these loans considered a bad thing everywhere (and even banned in some places). I don't see anything bad in them except the high interest. But I think it's a question of one's choice and responsibility.

Much of the problem arises because these loans are geared toward those who are the more vulnerable in society.

Most people who have a good credit rating will ask their bank if they need a small loan, or overdraft, to get them through a difficult period.

Naturally banks only want to lend money to those whom they consider to be good risks. They can afford to be choosy, and in the vast majority of cases will get their money back.

But, those who are greater risks don't have the option of borrowing money from the bank, they'll get turned down. And this is why some of these ones are forced to take out short term loans and, as they are higher risk, the lenders charge much higher interest rates.

I suppose on the rare occasion someone might feel it is worth repaying £25 interest on a borrowing of £100 over one month. But, that can work out at between 10 and something like 50 times what you might repay if that same £100 was borrowed from a bank.

So while it's true that everyone has a choice, it looks like with the economy in such a bad way more will get into spiralling debt by borrowing more and more, and ultimately paying back extortionate amounts of interest.

I think if these Payday firms were more realistic in the amount of interest they charged they'd not come under the gaze of the authorities as much as they do.

Pay Day Loans can actually be a very good thing but you really need to be able to manage your finances. It kind of goes against the tide really.

Typically the majority of people who use them are people who are low income earners and find there is "too much month left at the end of the money".

It can be a good thing if it is used very wisely. IE, you have wanted a new LCD TV for a few months and the one you want is on special offer from £800 all the way down to £500 and the offer will be genuinely closed on the 28th of the month (2 days before you get paid!). You dont have an overdraft (or cant get one or maxed out) and your cards are full if you have credit cards.

Therefore, the Pay Day Loan in this instance is a no brainer, you take the short term loan for £500 and at the end of the month you are expected to pay back £580. In doing this you actually save £800-580 = £220, assuming of course that the offer for the TV is legitimate.

So, Pay Day Loans can, in the right hands, prove very useful indeed. Unfortunately its the low income earners and the spenders and the mis-management of income that traps people into a never ending debt cycle. You have to be very smart about these things, if you are, they can pay off hugely, if your not, you pay off hugely.

As a note of interest, a previous close friend took out a small Pay Day Loan about 11 years ago to buy a washing machine, At the time I emigrated 4 years ago he owed around £2,000 simply because he could not manage it properly. He thought he was smart by taking out a new loan to cover the old loan and adding a little on top to treat himself... my heart goes out to him...

Alan

Reminds me of the saying that some people 'need protecting from themselves' unfortunately.

Thanks for explaining mates We don't have such thing here yet so I never knew what's the deal with them exactly

Payday lenders are ripping off the poor

Record numbers of people are falling victim to payday loan sharks and ending up with spiralling debt.

There has been a 400% increase in complaints to industry referee, the Financial Ombudsman Service.

The figures for the first half of this year are revealed as Government considers calls from the Office of Fair Trading for radical measures to protect the growing number of consumers trapped in high-cost debt.

Ray Watson from the Office of Fair Trading said a recent OFT report showed that people using loan sharks had limited options and found it difficult to choose between the alternatives.

He warned: "The recommendations we made to Government would deliver worthwhile improvements to these markets but more radical approaches, outside the remit of the OFT, need to be examined if the long-standing issues of lack of consumer power and limited supply are to be tackled."

Companies such as PaydayUK, Wonga and CashAdvanceOffer charge interest rates (APR) well into four figures.

Consumers are encouraged to clear debts quickly and will usually do so in a matter of weeks, but many come unstuck.

Concerns are also fuelled by the growing number of calls to debt charities, which have doubled since the beginning of the credit crunch in September 2007, according to National Debtline.

The number of people contacting Citizens Advice about debt also shot up by a quarter - to almost 2.5million - in 2009, compared to the previous year.


Read more: http://www.mirror.co.uk/news/top-stories...z16rbKBNKR

Payday loans are best way to fulfill your financial emergency in 24 hours. Get no fax and bad credit instant payday loans from payday loans companies and meet financial crisis in USA.

Choosing a direct payday loans lenders are a good option for every people to solve financial problem. <a href="https://www.paybillbuddy.com/">Instant no fax payday loan lenders</a> provide safe and secure cash loans.

Once in a while people have some sort of financial mishap. These times will lead you to needing some fast cash. That is whenever you can get a no credit check payday loan. You don’t have to have perfect credit, and the lenders understand that people have hard times from time to time. All they require is some basic data from you to get you started and you also can get that bill paid on time. You can find out more about this. Just go to: https://personalmoneynetwork.com/payday-loans/