Rising interest rates mean everyone is feeling the financial squeeze and the wait for the next payday seems to be getting longer and longer.
Research from MoneyExpert.com shows that around 1.23 million regular household bills are going unpaid, or being paid late, every month. These are regular payments such as council tax bills, mobile phone bills, landline phone bills, gas and electricity.
With the cost of the average mortgage rising by up to £1,000 a year recently it’s no surprise that some of us are finding it hard to juggle bills and expenses from payday to payday.
It can be tempting to wait until payday to pay your bills but living from month to month can be a strain. And missing a bill payment can lead to penalties or fees being imposed. In some extreme cases you could even be cut off.
Sorting your finances
Even if your finances are under control an unexpected bill can knock you off course and leave you struggling.
Sorting out a short-term problem can be difficult though as most banks will only lend for a year and paying with a credit card might not be possible.
If you need cash for a short period of time then this is where PayDay Loans can help you.
Payday loans are exactly what they say they are – loans to tide you over till the next payday. They are sometimes known as short-term loans or cash advances but are basically very simple.
You can borrow as little as £80 or as much as £800 or £1,000 and the loan is repayable at your next payday whether it is 31 days away or less.
You need to show the provider that you have enough cash to repay the loan when it is due. They will look at how much you can afford to pay back on an individual basis.
What you need
Some providers will allow you to apply online and all you will need is a debit card to prove you have a bank account. Some will provide the cash within two hours straight into your bank account.
Others might want bank statements, proof of address, your last payslip and proof of your signature such as a driving licence or passport to prove your identity.
If you apply online you may need to email or fax copies of bills and proof of address depending on the provider.
What you’ll pay
Charges are simple. Companies will charge you a flat fee – generally it’s around £25 for a £100 loan although some will charge £30 for a £100 loan.
The fee is payable when you settle the loan – so if you borrow £100 you’ll repay £130 at your next payday.
Because the loan is for a short-term the APR or annual interest rate on the loan is very high. Borrowing £100 and repaying £125 means your APR is 286 per cent. However payday loans are not meant for long-term borrowing and they beat the bank charges that you incur if you go over your overdraft or if a direct debit bounces.
Providers will sometimes allow you to roll the debt over from one month to the next but will charge another fee and most will insist that you start reducing the amount you owe after a set period of time.
Check the best deals
MoneyExpert.com can show you the best deals for payday loans and it is important to make sure you compare the offers from all the firms out there.
Compare payday loans today