In-depth guide to Payday Loans
- 5 years ago
This video explains payday loans and discusses what alternatives could be available to you.
------
▶️ ON OUR WEBSITE & "MONEY MATTERS" BLOG
- Payday Loans: https://www.solution-loans.co.uk/payday-loans/
- How the payday loan industry cleaned up its act: https://www.solution-loans.co.uk/blog/payday-loan-industry-cleaned-act/
- The state of payday loans two years after regulation: https://www.solution-loans.co.uk/blog/state-payday-loans-two-years-regulation/
------
▶️ SOCIAL
Like us on Facebook: https://www.facebook.com/SolutionLoanUK
Follow us on Twitter: https://twitter.com/solutionloansuk
Follow us on Instagram: https://www.instagram.com/solutionloans/
Website: https://www.solution-loans.co.uk/
Subscribe to our YouTube channel: http://bit.ly/solutionloansYT
------
▶️ VIDEO TRANSCRIPT
Payday loans are short-term, low value loans that have grown in popularity because they give people a way to access funds quickly to cover emergencies or unexpected expenses. They can be useful in situations where a borrower needs money quickly to avoid bouncing a cheque, missing a payment or when he or she doesn’t want to take out another form of finance that will tie that person into a longer repayment schedule involving a much larger sum.
While the headline APRs are high, payday loans actually compare favourably to some other forms of consumer finance for those who repay the amount borrowed within a month. The APR is not the actual interest that will be repaid on the loan.
A payday loan is a financial product that is meant to be taken out for a very short period of time. They are arranged over weeks rather than the years of repayments that other unsecured finance ties a borrower into. They were originally offered as a bridge between a borrower’s monthly wage packet but have grown in scope and many lenders now offer loans for just one week while, at the other end of the scale, there are payday loans that offer repayment schedules that stretch up to five months.
The loan is paid directly into a bank account and, on the repayment date, the lender will charge the amount borrowed plus interest to the borrower’s debit card or bank account.
If you need money quickly to meet an unexpected payment or emergency and you are confident that you will be able to repay the loan plus interest on the date agreed with the lender, then a payday loan, contrary to some coverage, compares favourably with other short-term finance. For in-stance, if you borrow £300 for 30 days and repay £400 a month later, the APR you have actually been charged is 400%. This compares well with an unauthorised overdraft at the bank where there is no legal requirement to show an APR and, if you go £300 over your limit for 30 days, making multiple payments during that period, you could end up paying charges of anywhere from £150 to £500 (representing actual APRs of up to 900%).
------
▶️ ON OUR WEBSITE & "MONEY MATTERS" BLOG
- Payday Loans: https://www.solution-loans.co.uk/payday-loans/
- How the payday loan industry cleaned up its act: https://www.solution-loans.co.uk/blog/payday-loan-industry-cleaned-act/
- The state of payday loans two years after regulation: https://www.solution-loans.co.uk/blog/state-payday-loans-two-years-regulation/
------
▶️ SOCIAL
Like us on Facebook: https://www.facebook.com/SolutionLoanUK
Follow us on Twitter: https://twitter.com/solutionloansuk
Follow us on Instagram: https://www.instagram.com/solutionloans/
Website: https://www.solution-loans.co.uk/
Subscribe to our YouTube channel: http://bit.ly/solutionloansYT
------
▶️ VIDEO TRANSCRIPT
Payday loans are short-term, low value loans that have grown in popularity because they give people a way to access funds quickly to cover emergencies or unexpected expenses. They can be useful in situations where a borrower needs money quickly to avoid bouncing a cheque, missing a payment or when he or she doesn’t want to take out another form of finance that will tie that person into a longer repayment schedule involving a much larger sum.
While the headline APRs are high, payday loans actually compare favourably to some other forms of consumer finance for those who repay the amount borrowed within a month. The APR is not the actual interest that will be repaid on the loan.
A payday loan is a financial product that is meant to be taken out for a very short period of time. They are arranged over weeks rather than the years of repayments that other unsecured finance ties a borrower into. They were originally offered as a bridge between a borrower’s monthly wage packet but have grown in scope and many lenders now offer loans for just one week while, at the other end of the scale, there are payday loans that offer repayment schedules that stretch up to five months.
The loan is paid directly into a bank account and, on the repayment date, the lender will charge the amount borrowed plus interest to the borrower’s debit card or bank account.
If you need money quickly to meet an unexpected payment or emergency and you are confident that you will be able to repay the loan plus interest on the date agreed with the lender, then a payday loan, contrary to some coverage, compares favourably with other short-term finance. For in-stance, if you borrow £300 for 30 days and repay £400 a month later, the APR you have actually been charged is 400%. This compares well with an unauthorised overdraft at the bank where there is no legal requirement to show an APR and, if you go £300 over your limit for 30 days, making multiple payments during that period, you could end up paying charges of anywhere from £150 to £500 (representing actual APRs of up to 900%).