How Do Payday Loans UK Work

How Do Payday Loans UK Work

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People who have a poor credit rating may not be able to obtain standard loans or credit cards. Payday loans UK are advances which are available for a few days or a month and can be offered to people with a poor or bad credit rating. They will normally be due to be paid back when the borrower is next due to be paid by his employer.

Most of us find there are times when we unexpectedly need extra money. This may be due to a bill turning up that we had forgotten was due, or car expenses, or a dental emergency. In all these cases it may be useful to be able to obtain one of these short term loans.

This type of advance is normally paid back whenever the borrower is paid by his employer. It is typically repaid automatically by direct debit. Applications are made on-line mostly but cam also be made by telephone. The amounts being loaned is typically within the range of fifty to fifteen hundred pounds.

A bank account with a debit card is required to apply for these advances. The person applying for the loan is required to be at least eighteen years of age. He or she must also be in employment before an advance will be considered.

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Credit reference agencies are used to determine the credit status of applicants. If the advance is not repaid, or is late, the credit reference agencies will be notified and the person who obtained the loan may find their credit rating is adversely impacted. The credit rating could be improved if the recipient of the advance repays the loan on time and in full.

Once approved, the money can be transferred to the applicant’s bank account on the same day the application is received. Payments are also transferred during bank holidays and at weekends. No security is taken for this type of loan.

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Costs associated with this type of loan should be considered carefully. Companies are required to display the representative annual percentage rate or APR, and these loans are often shown to have a rate of an incredible one thousand seven hundred percent or more. This is because the companies may charge twenty five pounds for every hundred pounds borrowed. Each company may have different rates and charges and therefore it is worth comparing their charges.

If the payment of a bill or unexpected cost is going to cause someone to exceed an overdraft it could be worth obtaining a short term advance. The cost of bank charges and late payment fees may make this option viable. The money can be obtained very quickly if needed.

Payday loans UK would be a safer and more secure option than lending from a loan shark. Loan sharks are not licensed, and there is no legal agreement in place, and normally no paperwork is provided. This means that the loan shark could vary the terms after the verbal agreement has been made putting the borrower at risk of even higher repayments.

Looking for comprehensive information on payday loans uk? Get the low down now in our article on how to get a few extra pounds till payday

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