A payday loan is basically a short term loan to help out until payday
. They are very quick and easy to get hold off in comparison to other loans. There is normally a small form to fill out and it asks the normal information you would expect a lender to ask, how much you are earning, how much you want to borrow and when you expect to pay it back. The repayment will be a matter of weeks rather than months, normally on your next payday, hence the name payday loans.
Ok sounds too good to be true so what's the catch? Well there is no catch really. The only thing you could call a catch is the higher interest rates. Like any loan as long as you pay it back within the given time then there is nothing to it. The loan got you out of a sticky patch and you have repaid it. The only problem comes like with any loan and this if you don't pay it back. The worst thing anyone with debt can do it just forget about it and hope it goes away, it won't. With payday loans lenders don't always check applicants' credit which means they are lending to high risk borrowers so they need to have a higher rate of interest to allow for a high level of non-payments.
Payday loans are just perfect when you need a cash injection before your payday. The idea of the name of the loan is that you borrow the money and repay on your payday. The money could be used for anything you need but normally it's to cover unexpected expenses. You might just be inpatient about redecorating a room in your home but don't want to wait a month. Or maybe you are due a bonus at the end of the month but could do with the money now. Whatever the reason you need money fast, payday loans are great as long as you pay them off when you state you will.
Choosing the right lender is very easy as there are plenty about. You can look in newspapers, watch the TV adverts or get searching on the internet. Remember to look at the APR rates. APR (Annual Percentage Rate) is basically the percentage of interest that will be charged over a yearly period. This figure is often used to compare loans and can vary depending on credit rating.