Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a broker not a lender.
Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a broker not a lender.
Oct 10, 2019
A payday loan is a type of unsecured loan that is considered to be short term. This type of loan is often easier available than a traditional secured loan is. The lender will consider the income of a potential borrower and base the available loan on this information.
While these types of unsecured loans often have higher interest rates, they offer immediate credit in a short-term situation. Often these types of loans are referred to as cash advances or payday loans.
In the majority of situations, it is necessary for a borrower to visit a physical location to obtain this type of unsecured loan. When going in to complete an application, borrowers will need to provide verification of their employment, often in the form of up to date pay stubs. The short term income of the borrower is determined by the lender and that is what the loan is based on.
In the majority of instances, these types of payday loans can be rolled over. However, this does result in additional charges for the borrower. How can you determine if a short-term loan is right for you? Well, if you find yourself facing circumstances where it is necessary to have extra money for an unexpected expense, there may not be time to wait for approval for a traditional loan. It is also very possible that you only need a small amount of money, not enough to warrant a long- term loan. These types of situations make short-term loans the perfect solution.
While loans that are short-term are not the best solution for long term financial goals, they can certainly be the perfect solution to help a borrower in a pinch. When using this type of loan, it is important to try and pay off by the deadline in order to prevent more interest being paid.