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Payday Loans and Cash Loans in the Uk: Friend or Foe?
The media sometimes gives cash loans a bad rap – even though statistics prove that these services keep millions of people out of bankruptcy and prevent billions of dollars in bounced cheque fees. In the United States, payday loans have been proliferating for years with mixed reviews. Some consumer advocates point to the APR if borrowers default on their agreement, while other middle class activists say that cash loans operations are the sole champions of the average family who works hard but may struggle from pay cheque to pay cheque regardless. "If you're short of cash at the end of the month and need emergency money to tide you over till payday, then [cash loans] seem like a solution," explains Sean Gardner, chief executive of price comparison site MoneyExpert.com. "Generally they allow you to borrow between £80 and £750 and they charge £25 for every £100 borrowed. If you take a loan of £500 you will repay £625, for instance." Tim Moss, head of loans at comparison website Moneysupermarket.com, puts it this way: "Payday loans are a bit like taxis – convenient for short journeys, but if you're going a long way, there are much cheaper ways to travel." He says that payday loans are good for emergency situations or when the consequences of not securing that money will be more dire (for ex: utility shut off fees, bounced cheque fees, or having your car repo'ed). "People should be careful to avoid using payday loans too often," says Moss. "My advice is to borrow in this way no more than twice a year, and only when it's absolutely necessary and you are sure you can pay it back quickly." In April, the Citizen Advice Bureau reported that "debt" was the #1 issue British citizens deal with. There are more and more people seeking help with mortgage refinancing, struggling to pay utility bills and requiring cash loans, the bureau adds. Frances Walker of the Consumer Credit Counselling Service (CCCS) says her organisation frequently talks to young, single renters who tap payday loans to help them cope. "The people who use payday loans are those for whom all other options are severely limited," Ms Walker explained. "They are less likely to have a partner's income to fall back on, or to be able to obtain a loan against property. Being younger, they are also less likely to have had an opportunity to build up a positive credit history, which will make it difficult for them to obtain standard credit cards or loans."
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Article Tags: Payday Loans, Cash Loans Article Source: http://www.articlesbase.com/loans-articles/payday-loans-and-cash-loans-in-the-uk-friend-or-foe-455061.html About the Author:
Gord Collins provides innovative marketing services for global companies. His SEO Company serves many prominent firms in the US, Canada, and the UK.
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