Are you currently going through financial trouble? Or maybe you’re simply trying to find some extra money to settle an unexpected expense? Whatever the case is, you’ve probably heard that “the best payday loans” could be a good option for you to choose. Although there are a variety of other options you should consider in addition, would payday loans work best for you?
We’ve dedicated this guide to help people in the UK find the best payday loans. We’ll cover the basic definitions, answer any questions you may have, and provide you with other options to consider.
How to Find the best payday loans
The term “payday loan” is usually used to describe a variety of short term, unsecured loans. They are also known by some as cash advance loans or payday advance loans. Lenders market them as ways to bridge the financial gap while waiting for payday. Maybe you need money now and not in two weeks, or you just need an extra sum at a specific time of the year. Payday loans are usually for a small amount, typically the size of someone’s monthly salary. They come in various amounts, typically from a £50 loan to a £1000 loan.
The period to pay back the loan is short, and the interest can be high. When used responsibly, people can often pay back the loan in full once their salary comes in. However if responsible borrowing is not put into play, this could lead to a dangerous cycle. If you don’t borrow realistically, once you pay the loan, you could be in the same situation as before. Avoid this cycle by doing your thorough research, and choosing your new lender carefully.
How do you know which are the best payday loans?
When people choose to take out a payday loan, it’s because they need immediate financial assistance. This need could stem from a variety of different issues. Many people choose a payday loan because their car needs repairs. Others might choose a short term loan to cover unexpected payments.
Whatever the case, people should only search for the best payday loan when it’s 100% necessary. Also, people shouldn’t use this option on a regular basis. This could lead to a devastating debt cycle that is hard to escape. Always make sure that you know your options completely before applying for a payday loan.
The Advantage of Choosing the Best Payday Loan
Many see the short payment period of payday loans as an advantage. If used responsibly, you could pay the loan back as soon as your next pay check comes. You don’t have to sign a lengthy contract with payday loans, and once you pay it, you’re free. Keep in mind that with this shorter payment period comes higher interest rates. Take these into consideration as you plan to pay off your loan. It can often be more than you expect but you are still responsible for paying it. Use a tool like a loan calculator to determine exactly how much interest you will have to pay.
The Things to Avoid
When searching for the best payday loans in the UK, you should keep a few things in mind. First, if a loan seems too good to be true, it most likely is! Some lenders might hide certain facts like the APR of the loan or payment options to attract unknowing customers. Do your research and ask questions. If the lender isn’t willing to answer simple questions, you should avoid them.
Second, if you see a loan that states “no credit checks” you should reconsider. Lenders perform a credit check not only for their own safety but the borrower’s safety as well. Skipping this step could put yourself at risk, and you could take on more than you can afford. Even if you have bad credit, only choose lenders that are open and honest about your situation.
Are there alternatives to even the best payday loans?
As with anything in life, there are usually a few other options that you might want to consider. Especially in the world of finances, it’s always best to seek out as many options as possible. Typically, when people consider the best payday loans, they need money as fast as possible. Because they’re in a rush, they might not take the time to seek out other opportunities. These are just a few other options you might want to consider:
Unlike payday loans, personal loans are unsecured, meaning you don’t have to put up collateral to get one. They are for a set period of time, and you’ll have to make fixed payments plus interest over this time. Some people choose personal loans because they can often get them through their credit card provider or their bank. While the convenience is nice, you should only choose one if you actually need. Paying off a loan plus interest in fixed payments can be challenging for some people. Only get a personal loan for the amount you need and nothing more.
Credit cards are fairly easy to get a hold of depending on your credit score. They offer a convenient way for people to borrow money in a sense through credit lines. A credit line is a set amount that someone can spend that the credit card company extends to them. It can be as little as a few hundred pounds or a few thousand. The credit line that a person has largely depends on their credit score. Their credit score shows how financially responsible they are including the debt they have and their payment history.
The credit card company will look at the person’s credit report to either approve or deny their application. Credit cards charge interest, and borrowers must pay their minimum balance each month. They can be dangerous if not used responsibly, however. Some people look at credit cards as unlimited spending power, but you should avoid this thinking. If you fail to consider interest, you might not know how much you owe. As with any financial tool, always use it responsibly, and don’t buy more than you can afford.
If you’re experiencing financial trouble, it’s always worth a try to ask for a pay advance from your employer. Not every employer will approve, but you’d be surprised how many will. If you choose this option, you should be careful since your pay check won’t be as big next time. Many people might find themselves in a trap by taking an advance. If you do take the advance, use it wisely, and make sure you to prepare financially for the future.
If you’re unemployed or claiming benefits from the British Government, you can visit your local Jobcentre for help. There, they will work to coordinate your benefits and work to find a solution that meets your needs. If you’re still waiting for your first benefits to come in or they’re late, they might give you an advance. Keep in mind that they will most likely ask you pay this back out of your benefits in the future.
Short Term Loans
Although they are similar to the best payday loans in some ways, short term loans offer some different benefits. Most notably, you can pay a short term loan over time in instalments rather than all at once. Paying over a period of time can help minimize the financial burden for the borrower. With a payday loan, the tight schedule forces you to come up with £1,000 at once plus interest. If paying over time, you might only have to pay £150 at a time, which is easier to manage for most. As always, make sure that you use short term loans responsibly, and work with a trusted direct lender.
Working with a Reliable Direct Lender
While you have a variety of lending options when seeking the best payday loans in the UK, some lenders are better. Many often choose to work with a direct lender for a variety of reasons, the biggest being the flexibility. When you work with a mortgage broker, they are the middleman between you and the money.
They can’t waive certain guidelines or requirements to earn your business, and you’re stuck with the set rules. Also, because they’re middlemen, you don’t usually have an initial point of contact with the lender. The broker works with a variety of different lenders and finds the one that meets your needs. By working with a reliable direct lender, you can save time and work with them from the start.
Often when working with a broker, you might pay additional fees. They have to make their money somehow after all! They charge a commission usually that the borrower has to pay. If you choose a direct lender like Moneyboat, you won’t pay nearly as many fees.
Things to Consider When Choosing between the best Payday Loans
While some people might choose a payday loan if they have a bad credit score or are unemployed, many lenders won’t offer loans for these people. Although this isn’t the best news, it’s better to know beforehand. Short term lenders make money from working with reliable borrowers that can make their payments. If you are in severe financial trouble and don’t think you’ll be able to make the payments, you should consider other options.
For example, if you are unemployed, you can use the resources from your local Jobcentre to help you. If you are employed, consider asking for a payroll advance or seek out other benefits from the government. Whatever your case may be, know that there are options available and you should weigh them accordingly.
Compare Your Lender to Moneyboat UK
Many people assume that all payday lenders in the UK are the same. This couldn’t be further from the truth! Some offer instalment plans, and some don’t. Some lenders provide high-quality customer service, and others don’t. Lenders will also offer different loan amounts as well. Moneyboat UK isn’t a payday lender, but we offer similar short term loans with flexible options for borrowers. See how your lender stacks up by comparing them to Moneyboat UK below:
Why You Should Choose Moneyboat UK
People come to Moneyboat because of our impeccable customer services and friendly approach. While we take our finances seriously just like our customers, we do so with a friendly face. Our customer service team is available between 8:30 AM and 5:30 pm on weekdays to help our customers. Have questions about a loan before you apply? We can answer them! Want to know more about your current instalment plan? We can help too! Even if a problem arises, get in touch with us, and we’ll try to work with you.
Moneyboat is the flexible option for borrowers in the UK. We offer loan instalment plans to best suit the needs of our borrowers, so they don’t have to pay all at once. For first-time borrowers, you can get a loan from us for as much as £800. For return customers, we raise the cap to £1,500 to thank you for being a loyal customer.
Finally, when you work with Moneyboat, you don’t need to be a financial expert to understand your loan. We present our loan term is clear, easy to understand ways to help you make the best decision. Our staff is happy to explain anything to you also and will answer any questions. We want our customers to have a great experience when they work with us. No matter their situation, we strive to offer the same top-notch lending services to everyone. You are members of our community, and we treat you with the care and respect you deserve.
If you are interested in learning more or would like to see our short-term loan options, please visit our homepage. Make sure to check out the loan calculator to see how much your loan will cost before you apply!