Most borrowers are extremely cautious about their credentials and personal financial documents and most often hesitate to let other people know. Hence, the payday loans in the UK are one of the most unique options to sanction a loan without letting people check your documents or your credit report. However, the most common question asked by the financially aware citizens of the UK is ‘Are payday loans harmful for our financial future?’
Taking out loans simply pushes you deeper into the debt hole, as you’re obligated to repay the lender. Though payday loans are the best and the most convenient way of realizing your short-term financial goals, you must consider the downsides of such a loan that requires no credit-check. Here are some disadvantages of payday loans that will help you take a wise decision that does not hurt your immediate financial future. Check them out.
- Payday loans are extremely expensive: The biggest disadvantage of UK payday loans is that they carry extremely high APR (Annual Percentage Rate), mostly within the 100% + bracket. While you run to a payday loan lender, they may inform you about the outrageously high interest rates, as these are high-risk loans. However, this does not change the fact that you have to repay them with difficulty. Thus, most debt experts in the UK are of the opinion that a debtor must stay away from payday loans as long as possible.
- Payday loans can soon become addictive: As payday loans are short-term loans and provide immediate help to a borrower, the borrower becomes addicted to such loans. Taking out too many such loans will get you into dire financial circumstances, as you will drown in an ocean of payday loan debt. This can trash your credit score and make you unworthy of receiving further lines of credit.
- Short repayment term: Payday loans have the shortest repayment term. However, if you are not financially sound enough to meet your debt obligations, it is most likely that you will not be able to repay the loan back after a month. Therefore, with strained financial circumstances, you may find it tough to repay the loan within a month.
- Missed payment can cost you dearly: As this is common with every kind of loan, missing a payment may force the finance company to run after you for the money and charge you dearly for missing the payments. This can get you out of control as your payment can reach a sky-high level after adding the late fees. Therefore, you always need to repay your loan on time to avoid added charges.
Having said all that, in times of financial emergency, payday loans still offer a better option than an unauthorized bank overdraft. However, as mentioned, you should be in a position to be able to repay the loan at the appointed time. If you feel that you cannot repay the loan on time, you should not take out a payday loan. You need to arrange some other form of finance. If you’re going through adverse financial circumstances, get help from debt advisors before taking out a payday loan. In you do take out a payday loan, make sure you plan your repayment schedule to stay away from amassed payday loan debt.
www.enjoyloans.com. We are here to help you, not harm your credit rating or place negative marks in your credit file. Quick, easy, different and that’s the Payday Online way!