Instalment, Short Term and Payday Loans
People are experiencing financial difficulties everywhere. What is worse is that some of these cash problems come at the most inappropriate time. This is the main reason why many people are pinning their hopes on taking out a UK loan. Have you heard of the expression ‘it’s just money?’ Well it is just money until you need it badly.
Money plays a big part in your daily life. The best thing to do is to manage your cash the best you can. But unfortunately, even when you do so, emergencies happen and it can happen anytime.
If you look closely, you may say that it involves high interest rates. But if you make a detailed computation, they give you a more economical picture and a justified one. Once you borrow 100 pounds, the interest rate sometimes reaches 1000 percent. If this where a year-long marathon, this would be obscenely monstrous! But then an instant lending does not last that long. In fact it lasts way shorter than that.
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These are products that only last for a short-term. Usually the term involved is only for thirty days. This means that lenders will have to follow the rules imposed on short term lending. If the computation is based on these rules, then you are going to be provided with a different scenario. At the end of the 30 day period, that 100 pounds will turn to be 124 pounds. It needs to be paid back by the borrower. Use a loan calculator to figure out how much is to be repaid. And this amount is already inclusive of interest rates.
The reason why this is so is that all lenders and loan companies are regulated by the Financial Conduct Authority. Under the authority, all lenders are not allowed to charge more than 0.8 percent each day.
All online lenders will openly show you how much you are going to repay for the funds you borrowed. This includes the exact rate involved. This will be shown before you submit your application form.
Their transparency to every borrower includes showing you the amount of charges and fees included. These are basically imposed if you fail to repay the funds you borrowed on time. But because of the ruling on this, lenders are not allowed to charge more than 15 pounds on late repayments.
Aside from these rulings, there is another rule that protect you from paying more than double the original source of the amount borrowed. This ruling protects you from going down into a spiral situation that might lead you to more debts which you cannot pay. In the same way it also serves as a protection for the lender that he still has a chance to get his money back.
If not for the ruling, the money could blow up into proportions might not be able to repay. This is a big loss to the lender because he has no way of getting his cash back. Remember than they have no collateral involved to cover for the losses. The ruling is aimed to keep the repay at a level that a working class borrower can still find ways to pay it back. Borrowing 100 pounds from a lender means that the maximum sum to pay is 200 pounds. The end amount includes all fees and interest rates.
Payday lending is in fact a very good way of dealing with your unexpected problems. But it is important to limit it within one or two. These will serve as a solution to your crisis. But taking in more than this might lead you to more difficulties. When finding yourself relying more on instalment loans to get you out of your issues, then something must be wrong with the way you handle your finances. Sit down and analyse your actions and situation. By doing this, you will be able to identify at which points of your flow are you having problems with.
Once you learn what these things are, move on to applying the necessary solutions to these problem points. This will prevent you from going into an endless whirlwind of difficulties. By not doing so, you might find yourself in bigger hole in the future.
What is important, do not fall into bad habits. The first thing you need to do is to stop borrowing money. The next thing you have to do is to pay out the existing ones. This will reduce your difficulties immensely. When you cannot repay, find other ways to repay it. Talk to your lender and have your loan extended. Aside from that, you have other options to take to repay for the money you owe.
Comparing them to any other lending product, and something more long term like mortgages, you will find this more easy to use since it comes in the form of cold cash. Cash is always better to have than a credit card or any other product. Once approved, you get the cash and you can dispose of this in any emergency situation you have. Paying with cash is always the best option.
The only other wise option to have is your card. This will give you a solution right away. But not everyone has a credit to use, especially in an emergency basis. The reason it’s the next best solution, you only have to present your card to the establishment and have it swiped. That is it and you are done. But another problem that people with credit cards and who plan to use it for an emergency is that not all establishments support the use of credit cards. Or if they do, they might not support your banks credit card. This makes your card useless for your emergency.
Another thing about using your debit card is that you take out a loan with it. These are credit cars. The loaned cash is taken against your credit limit. But this will have to wait for an approval. Now this is something that you cannot afford to do.
Still, between the two, taking out a pay day loan is the better option. Because it is fast and easy to apply for. And you get everything liquid which makes versatile the cash in all establishments. Once deposited to your account, write the establishment where your emergency is due a check to cover for your problem.
It is certainly a good thing that these kind of loan lenders exist. They benefit those who are not well off and are in need of financial help at this very moment. The accessibility of which makes this product attractive.