They are a quick fix. A payday loan is designed for emergency financial needs. If you have an expense that is beyond your budget and your next payday is still weeks away, then you do not have the luxury of time. In comparison, applying for a traditional loan can take far too long.

The interest you pay is only for the length you take to repay. Usually, when borrowing from a bank the duration is fixed. The bank calculates the interest rate for this period and your repayment amount is divided into equal installments.  Even if you only need cash for six months or less, you will need to borrow for the time stipulated by the bank.

They are easy to manage. A payday loan is a short-term loan, so the interest is calculated beforehand and specified by the lender before the agreement is signed. A traditional loan may work in a similar way, but you will need to plan out your monthly expenditure for at least two years.

Highly regulated with no hidden fees. Contrary to popular belief, payday loans do not carry additional charges apart from those stated by the lender. Websites are required to disclose every single detail about all fees and charges.

They are not a long-term liability. Unlike a traditional loan, your finances are not restricted for months or years. Get a payday loan and repay it when the next pay day arrives. If you get paid fortnightly, the liability is only for those two weeks.

What exactly are Payday Loans? Payday loans are unsecured loans which can be used for meeting your immediate financial needs and then deducting the amount from your bank account on your next pay day. A Payday loan is also sometimes known as an online payday loan, cash advance loan, cash loan, payday cash advance and fast cash.

How should I apply? The application process has become easier than ever with the advent of the internet. By filling in a simple online application form with some personal information you are just steps away from getting a cash loan. Your credit history is not checked and you will not need to fax any documents.

Am I Eligible? To be eligible for a payday loan you must be:

•    At least 18 years of age
•    Employed or have a steady income source
•    Have an active, open bank account.

How much cash can I borrow? Generally, you can borrow up to £750 depending upon your assessed ability to repay. There are many sites that act as a mediator between you and the potential lenders who will lend you the required amount of money.

How long do I have to pay back my loan? Typically, a payday loan is to be paid back on or before your next payday. However, some companies are flexible with respect to the loan duration as well, and as long as you let them know well in advance, your loan can be carried over to your following pay day.

On paper, getting a loan from a bank is a great idea as all payday lenders charge their customers considerably higher interest rates for their loans. Traditional loans have much lower interest rates, but are often a more complicated process and require more time when applying for one. Here are some other things to consider when weighing up the differences of a payday loan and a traditional bank loan:

Sometimes, only a small loan amount is required and most traditional lenders will not consider this a large enough amount for them to concern themselves with. Conversely, a payday loan is designed for these types of loan amounts and can usually be approved very quickly with no problems.

Traditional loans typically require a credit check as part of their application process. However, the application procedures of payday lenders look for evidence of a steady income so credit checks are unnecessary.

Traditional loans take some time to apply for and there are typically several layers of procedure to endure at a bank before approval is granted. Pay day loans on the other hand are designed for speed and can be approved in a matter of minutes.

Traditional loans will always be needed in the financial world, but they do not have the immediacy or flexibility that payday loans can offer. But, always remember that just because payday lending is easy and convenient, it should not be considered as a way to increase cash flow on a regular basis.

There are times when we all can unexpectedly find ourselves a little short of cash on pay day and need a little loan to tide us over until the next pay cheque. Although a payday loan is not for everyone, there are some good reasons for considering one:

The offering of payday loans in the UK is a growing industry and there are a lot of online companies fighting for your business. This is very good news customers as companies compete with each other to provide ever increasing choice and better borrowing rates. From time to time, there may also be the chance of stumbling upon promotional offers.

Ease of access is another important factor as most people seeking payday loans want them quickly and easily. It only takes a matter of minutes to search the internet and apply online, and, in many cases, receive a loan amount almost instantly.

Payday loan lenders generally do not need to run credit history checks on their prospective clients. This is good for customers as it means you should still be able to qualify for a loan even if you suffer from bad credit.

Most lenders, such as banks, look at your total debt load, long-term borrowing, and your ability to repay before offering you a loan. The only security payday loan companies look for is that you have a steady job and therefore have the ability to pay back the loan on your next pay day.

There are several reasons why UK payday loan lenders do not need to check your credit during the loan application process:

Other requirements and checks are followed. These guidelines are not quite as formal as requesting a full credit check, but you will need to prove a few things to the lender:

•    You must be over 18 years of age
•    you must be a UK resident
•    You must be currently employed and receive regular pay
•    You must hold an active bank account that your salary is paid into.

They offer smaller loan amounts. When you apply for a loan, the lender will not allow you to apply for larger amounts of money in the same way as a traditional lender would. Payday loans are to help you with small, unexpected expenses until your next payday, so offering smaller amounts makes sense. A typical payday lender will limit their loans to around £750.

Once your payday loan is approved you will be required to allow the lender access to your bank account. This basically guarantees that you are going to be able to pay off the loan, which greatly reduces the liability of the lender.

The interest on payday loans is high. One of the main reasons why lenders can afford to lend you the money so quickly is that you are paying a high Annual Percentage Rate (APR) for it. Standard APR for a payday loan is around 1300%.

We have all had times when urgent car repairs or an unexpected bill has popped up and left us short of cash on payday. Normally, it is easy enough to get a ‘payday loan‘ from family or a credit card to tide you over and pay it back next payday. However, what happens if you don’t have that option?

A quick search on the internet will show you how many companies now offer payday loans, as a whole industry of payday loan companies has sprung up to provide this service.

But with so many companies to choose from, which one do you choose?

One UK payday loan company in particular is getting a good reputation for a simple and genuine service. Payday Bank (www.paydaybank.co.uk) offer short-term loans for your immediate financial needs. You can apply online for a cash loan, get an immediate decision, and get up to £750 in your bank account the same day.

Your credit history is not important and in most cases you don’t need to fax across any documents as they generally look at your ability to repay your payday loan on your next payday. All you have to do is fill out a short online application and provide them with your personal, income and loan request details. They will then search their network of loan underwriters to provide you with the payday loans that are best suited to your requirements. Everything is done online, is completely confidential and you can be confident that your information, both physically and electronically, is protected with advanced online security measures.

A payday loan can be a viable alternative to using your bank account overdraft as the fees, and interest charged may be less than what your bank will charge you for using your overdraft.

If you are short of cash, unwilling or unable to use credit cards, and need a short-term solution to pay your bills then your options are:

•    Use your bank account overdraft
•    Take out a payday loan
•    Don’t pay your bills on time

Each of these options will cost you, but which will cost you the least? Consider the following:

•    Bank overdraft charges can be quite high. Also, some banks may charge you for not having sufficient funds to pay the original overdraft charge. Depending on your bank, other fees could include a charge for having a negative balance.

•    Payday loans have fees and interest.

•    Not paying your bills will incur late charges and could result in having your services turned off.

You may find that payday loans could cost you a lot less than not paying bills on time or being stuck with overdraft charges from your bank. The APR for payday loans seems high, but it is only set for a specific amount of time. When you compare it to other fees, it can be less.

As long as you do your research beforehand and pay your payday loan back on time, it could well end up being the least expensive alternative.