Payday Loan Advice

It’s easy to get sucked in to the idea that pay day loans are the way forward if you’re short of cash this month – we are inundated with emails, texts, phone calls and adverts on the television and internet offering us ‘free’ money, supposedly. The key is to not fall into this trap, payday loans are not free money; nothing in life is free! Payday loans in particular are renowned for extortionately high interest rates and if you do a basic comparison between the companies you will see that if you were to borrow, for example £100, the best deal out there will expect you to pay £125 back to the company. 25% interest rate on a loan that only lasts 30 days is absurd and ultimately you will end up worse off.

The major companies are all competing with each other to offer the best deal but the difference between the exact amount of money lent and returned is miniscule and therefore it is all about exposure and customer services. The greater exposure the company receives the more people are likely to borrow from them and this creates, in theory, a perpetual cycle of popularity and success. Therefore all of the companies offer the same ridiculous interest rates because they have to make money, that’s the basic rule of business and in order to gain said exposure initially they have to pay to advertise.

So, if you do find yourself in the position of needing a short-term loan are these companies the best way to get that money? The easy answer is no because the interest is so high and the pay-back time so short that the implications of a late payment is grave. However, this is easier said than done when you have bills to pay and mouths to feed. It’s also easy to recommend a budget that you stick to; look at how much you need each month and strive to stay within those boundaries but that again is easier said than done. When you do find yourself in the position of needing to borrow money from a payday loan company check the following things: how long the loan is for, exactly how much you need to borrow and don’t borrow anymore, how much the interest is going to be, how much extra interest will be whacked on top of the pay back total if you are late paying it back and how reputable the company is. Have a look on their websites, they all have review pages now and you can see how other customers have faired with them.

For more information, speak with the Wonga customer service department.