Pay Day Loans Comparison
Payday Loans v Overdrafts
Overdraft can also be thought of a short term borrowing facility however they are usually attached to your bank account and not always available to customers depending on their banking history. Interest rates on Overdrafts are defiantly lower than a payday laon, however overdraft arrangement fees should be taken into account as a cost of the credit facility.
Payday Loans v Credit Cards
Credit cards are probably one of the most popular borrowing facilities used by the British public today. Their interest rates, while higher than other borrowing facilities, are less than a payday loan. They do however have some disadvantages when compared against a payday loan, such as the timescales involved with applying and receiving a card through the post.
Payday Loans v Secured Loans
A payday loan is an unsecured facility, therefore if the worst happens and you are unable to pay back a loan then they payday loan company cannot claim your property or secured asset to recover their money. This is especially important as losing your house is one of the worst outcomes of being in debt. Secured Loans are also usually for a lot more money than you can borrow on a pay day loan and additional fees such as property valuations can make it a costly finance facility.
Payday Loans v Unsecured Loans
Essentially a payday loan is a unsecured loan facility, just packaged into a shorter period and smaller amounts. When the financial climate is bad, banks and lenders can be resistant to lending on an unsecured basis. This is also true if you have had credit problems in the past as this is a higher risk of borrowing for a lender. As the word itself “payday” denotes a payday loan is a facility to tide you over until your next payday.
Remember, with all borrowing you must think wisely about your ability to pay back a loan and your own personal financial circumstances. If you are thinking of borrowing money you should get professional financial advice or debt advice and consider the consequences of not being able to pay back your repayments.
|