As the global financial crisis continued to be felt across the country, more and more families felt the pinch in 2012. Last year the average disposable income fell to a 9 year low. If there’s one time of the year that more households struggle it has to be the festive season, as families, couples and singles alike blow their budget on gifts and celebrating.
Now as we welcome in the New Year, many households have started to look for a quick solution to their money problems. The good news is that it’s possible to borrow safely on a short-term basis; you just need to do your research first. Here is a look at some of the safe and trouble free ways to borrow last minute funds without being stung in the long run.
What do payday loans involve?
Payday loans are a last-minute solution for people struggling to make a payment or bill. The charity Shelter this year released figures that show almost two thirds of the population struggle to meet rent or mortgage payments and 1 million people turn to payday loans as a solution for housing costs.
Whilst this is not a good practice to engage in regularly, the use of payday loans can be an effective way to relieve financial burdens on a single instance.
What are the problems?
Some payday loan providers have developed a bad reputation and much of this comes down to the interest rates. Their instantaneous nature means that payday loans do attract a higher interest rate than your average loan or overdraft – which couldn’t be approved at such short notice when times get tough.
It’s important to consider whether you’ll actually be able to make your scheduled repayment because if you don’t the penalties may be quite severe. Only take out a loan if you’re confident that you’ll be able to make your repayments once your monthly wage comes in.
How to know which payday loan is right for you?
Much like any product or service, the best way to find the right loan is by comparing your options. Money saving sites can filter the options based on your location, lending period and how much money you need to borrow.
There are some companies that have generally gained a better and safer reputation than others. For instance kwikcash Payday Loans is widely regarded as one of the more reliable choices on the market, combining lower interest rates with high approval rates.
As a general rule of thumb, when borrowing be sure to keep in mind that if the deal looks too good to be true, chances are it probably is. Always check the fine print and make sure there aren’t any hidden charges and expenses.
The StepChange Debt Charity revealed that payday loans have increased by 300% in the past 2 years, meaning more and more people are utilising the service. This means safer borrowing options for the average household, as providers compete to offer better, more reliable deals for people in a tight financial position.
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