People generally find themselves in financial crunches in the second last week of the month. Car breaking or appliance repair in those weeks can be considered an emergency expense. You need funding in a hurry because you need to resolve the situation, which cannot wait till your next paycheck.
For fast payday loans online in the UK, approach LoanPig. You have to fill out a loan application online and submit the necessary documents like employment proof, bank statement, and permanent address or ID.
5 things to consider before applying for a payday loan
Will I be able to handle the cost?
Incredibly high-interest rates and fees are charged on the loan amount, which escalates the amount you will need to pay back. These high-cost loans charge triple-digit APRs [Annual Percentage Rates].
For example, if you borrowed £100 for a 2-week payday loan at a simple interest rate of 15% then for repaying in two weeks the 15% interest rate is equivalent to 400% APR. The loan length is just 14 days, which means daily interest is £1.07. Some payday loans carry APR as massive as 1,900%. It is more than the 12% to 30% APR charged on credit cards.
So, if you are determined to apply for payday loans then consider your affordability or you can add penalties to missed payout.
How will I repay the online payday loan?
A payday loan means to repay in a single payment or the next salary payment. Repayment terms will differ. To pay off debt there are a few options –
- Postdated bank check during application.
- Direct debit from a bank account.
- Check mailed on the next payday.
Many payday loans don’t get repaid, so borrowers roll it over or re-borrow it for another 30 days. It means the old balance is rolled over into a new loan. Borrower gains time to repay but it even means escalating the fees, if the debt cycle continues.
What happens if I cannot repay within the due date?
If payment bounces, the amount you owe increases. Generally, payday loans don’t get added to your credit search history but if you default several times then your account is mailed to the credit bureau.
You can be sued or assets are seized. Lenders sometimes call your employer, friend, and family or even send your account to a collection agency. All this is chaotic and you can hardly find another lender to save you from this situation.
Is the online lender licensed?
You need to be cautious about online transactions, especially with payday lenders. There are chances that the potential online lender is not regulated or licensed. Some websites gather your detail and offer them to other payday lenders. So, always consider a licensed payday loan lender.
Read the terms in the fine print
After payday loan application approval, borrowers need to sign a contract. Read the agreement terms carefully and if you don’t understand ask for clarification before signing. The agreement will define the fees, interest rate, due date, and overall loan cost. Payday lender’s guidelines differ from one county to another, so please check your jurisdiction before applying.
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