Cash loans pros and cons
Cash loans, cash advances, short term pay day loans - these are all the names for the sort of rapid short term loan that various companies such as PaydayUK, Wonga, Paydaybank and Quickquid offer to customers needing a bit of emergency cash cover before pay day!
In a nutshell, these cash loans are offered between £80-£750, until payday - or the next 30 days. They are charged according to a flat fee structure and will charge approximately £25 per £100 borrowed by the customer. This fee includes all interest rate charges and admin fees, so the final amount you'll pay is clear upfront. The money is wired into your account the same day via CHAPS, if it's approved before 3pm (you just need to fill out a short form online and provide evidence of your employment - and voila, the cash will wing its way to you!
There are definite pros and cons when considering these cash loans, in the same way as with any other kind of loan, credit card or overdraft.
Basically the pros are that these cash loans are really easy to organise - they just involve a short form, and a decision is made very quickly. The money will also be with you straightaway - as quickly as the same day if the application is made and the approval granted before 3pm. (You'll find that many of the cash loans providers can process a request within an hour, particularly if you are a repeat customer - and in fact there are sometimes discounts for repeat customers too. It is, however, worth remembering that there is nearly always an extra charge for quick money transfers.) The other benefit is that the loans are only designed to be very short - so you'll have it paid at your next payday uk and it will be gone after that - within 30 days in fact. That can offer you more peace of mind than say a credit card balance which can roll over and over and keep snowballing! Finally the other related benefit is that these loans don't always require long credit checks, but rather evidence of employment and impending payment of your wage - and the charging structure is simple with most cash loans companies charging a flat fee - so you know exactly how much you need to pay back, right from the word go.
As for cons for cash loans - well these can be the higher relative charges, compared to say, a personal loan or cheap introductory rate credit card. However these take longer to arrange and may not give you the funds in time - and also they are harder to access nowadays as finance providers are tightening up their credit acceptance criteria. The other danger with this type of loan is that if you don't stick to the 30 day repayment terms, the charges can escalate very quickly - but this is also a potential problem with other loans or credit cards/overdrafts.
It's always important to do your best to have a full idea of your overall financial situation before applying for any kind of credit, including pay day loans. They can be incredibly useful for a lot of people, providing a quick cash boost at the time when it's needed most. As with any short term solution, they may not be appropriate if you are seriously struggling with your finances. If this is the case, you may wish to look into advice about how to deal with debt.
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