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How Do Cash Advance & Payday Loans Work?
A cash advance or payday loan is a small, short-term loan that can be used as an advance on your salary.
Cash advance or payday loans can help you out financially in emergencies, such as urgent payments or any unexpected bills.
Cash advance or payday loans are available from £50 to £750.
These cash advances or payday loans are usually repaid in full when you receive your salary at the end of the month, however some of these loans can be repaid over a period of up to 55 weeks.
Cash advance and payday loans have notoriously high APR's or interest rates, however although they offer the APR as a means of comparison, most lenders will charge a flat rate depending upon the amount you borrow and how long you take to repay it.
The actual cost for borrowing money with a cash advance or payday loan will be agreed with you before you decide to borrow the money or not.
What can a cash advance or payday loan be used for?
A cash advance or payday loan can be used for anything you need the money for, as long as it's legal of course!
Cash advance and payday loans are ideal if you need fast cash for an emergency, such as unexpected home or car repair bills, urgent payments or simply short-term cash flow problems.
It is important to remember that cash advance or payday loans are only really suited as a short term financial aid and most will require full repayment when your salary is paid into your bank account.
What if I have a poor credit history or a low income?
Cash advance and payday loans can be taken out by people with a range of financial circumstances, even if you have a poor credit history or are on a low income.
Few cash advance or payday loan lenders will actually check your credit rating, so applying for this type of loan will not affect your credit score.
Cash advance and payday loan lenders will usually require you to be in employment and have a current bank or building society account with a debit card. This is so that the loan can be repaid when you receive your monthly salary.
What you should be aware of
Although most cash advance or payday loan lenders charge a flat fee, the cost for credit can be very high, so it's important to repay the loan promptly and only borrow money in real emergencies.
They should be seen as a last resort if you cannot borrow the money from friends or family.
How do I know which cash advance or payday loan lender to use?
If you do decide to opt for a cash advance or payday loan it's pretty important to make sure you choose a reputable cash advance or payday loan lender.
Nowadays any company who lends money is, by law, regulated by the Financial Services Authority to protect customers against any unscrupulous companies.
Choose a cash advance or payday loan lender that is upfront about the charges involved. Make sure you know exactly how much the cash advance or payday loan will cost and when you need to repay it.
Remember to always compare at least 3 cash advance or payday loans before you settle on the one you want to apply for.
Compare cash advance & payday loans
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