Is a Payday Loan the Quickest way to Borrow?

There are many ways of borrowing money but a payday loan tends to be well-known for the fact that it is a quick way to get money. But is this true?

How quick is a payday loan?

It is good to start by finding out how quickly the payday loan can be arranged. Different lenders will vary in how long it will take them to get you the money. There are some lenders that will be extremely quick and they could get the money to you in a few hours. However, some will take longer, perhaps a few days. These differences could be quite significant for you and so it is worth investigating to see how long each will tend to take. It should say on their website.

The amount of time can be determined by how long it takes you to find the information that you need to give to the lender. They will need some proof of ID as well as your bank details and proof that you get paid regularly. You should be able to get this information but if there is any delay then this could affect how quickly they can process the application.

You may also find that the time of day you apply could make a difference. Some lenders will work right through the night and at weekends so you will be able to get money at any time. However, there are others that will only be available in office hours which could mean there will be a delay in processing your application depending on when you apply.

The application process tends to be very simple as well. This means that it is easier to get the forms done and this can speed up the process of application compared to other loans.

How quick are other loans?

The speed of other loans will also depend on the lender. Some loans will take a long time to approve due to lots of information needing to exchange hands and lots of checks to be done. This tends to happen more for large loans such as mortgages. However, it is worth trying to find out how long other applications might take. You should be able to get an idea if you ask in a branch or talk to customer services.

It might be that you already have a source of borrowing arranged that you could use. If you have a credit card then you could use this right away without having to worry about arranging anything. That is assuming that you have no spent up to your credit limit.  The same will apply if you have an overdraft. You might want to take advantage of the fact that you have money available to you already. However, it is wise to compare the costs of the overdraft and credit card to that of the payday loan. If you stay overdrawn for a long time then it could be extremely costly, although UK law will be changing soon to protect borrowers against the excessive overdraft fees that can be charged, particularly for unauthorised overdrafts. If you decide to take a long time to repay these forms of borrowing they can be extremely expensive.

Is speed the most important factor for me?

It is worth also thinking about whether speed is really the most important factor for you. It might be that you will be able to wait a little bit of time. Even if you can wait a few hours it will allow you to have time to compare the different loan types and the different enders to make sure that you get the most suitable loan for you. If you have even more time, then you might be able to find ways to borrow which are perfect for you and your needs. This is not to say that the payday loan will not suit you, but until you have compared all the options available to you, you will not be able to know whether this is a good option or not.

Conclusion

So although there are some loan types which can be quick sources of income if you have already arranged them, if you want a speedy loan from scratch, then a payday loan will be the quickest. Different lenders do vary in the speed that they take though and so if you need it extremely quickly it is worth checking and choosing the very quickest. However, it is important to make sure that you are aware of how they work so that you can decide whether they are the right loan for you. You also need to think about whether you really need it that fast or if you can spare some time to do a bit of research to make sure that you are picking the right type of loan and the right lender.

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How Cheap is a Payday Loan?

Payday loans do vary in price and there are different aspects to them which will determine how much you will pay for them. It is good to find out how much you will pay for one as well as how that compares to other borrowing so that you can decide whether it is the right choice for you. Do think about the value for money as well as the costs though as this can be more important in some ways.

Calculating the cost

You will need to start by calculating how much the payday loan will cost you. This is much easier to do than you might think. This is because payday lenders have calculators on their websites which you can use to work out how much a loan will cost you. They also have representative examples such as the one seen on CobraPaydayLoans.co.uk so you know exactly how much you’ll be paying. You just have to enter the amount that you are intending to borrow and how long you are borrowing it for and it will let you know how much you need to repay in full. This is something which you should be able to do on every lenders website and therefore you will be able to compare the cost between lenders. This will enable you to find the cheapest lender. You will also be able to see how that cost compares to other types of loans so that you can see whether there are other cheaper options.

Additional costs

It is worth remembering that these may not be the only costs that you will pay for the loan. You will need to think about what might happen if you are not able to repay the loan. If this happens then you will be charged extra money. These fees will also vary between lenders and so it is worth finding out how much they will be just in case you end up having to pay them. It may not be so obvious compared with finding the cost of the loan and so you might have to contact customer service sin order to find out for sure. This could be a bit trickier than just using a calculator on the website but it is worth it. If several lenders are similar in cost or if you are not completely confident that you will be able to repay the loan on times, then you need to be aware of the consequences of this and how much you might have to pay out as a result.

Can I afford it?

It is always worth working out whether you can afford the loan before you take it out. You need to consider the amount that you will need to repay and when you will be expected to repay it. Then you will be able to work out if you think that you will have enough funds to cover this cost. Make sure that you do not guess but that you actually check your bank records to make sure that you are completely confident that you will have enough money to repay the loan when you need to. The repayment will be required on the day that you are paid and so you may feel happy that with your salary in the account, there will be enough to repay the loan. However, you will need to make sure that there will also be enough money to cover all of your other expenses that month as well. If you do not check this it could mean that you will end up short at the end of the month and not be able to afford food.

Value for money

As well as looking at the actual cost of the loan, it is worth working out whether you are getting good value for money. People are often prepared to pay a bit more for something if they feel that it is benefitting them in a really positive way. So, you might find, for example, that a payday loan is more expensive than a different similar loan. However, the fact that it can be arranged quickly, it is paid back quickly, you need no credit check and it is simple to apply for may make it worth that extra cost in your opinion. This means that you should not just be concentrating on whether it is cheap or not but whether you feel that you are getting a decent service for what you are paying. As a payday loan is so different to other loans it will be offering you something very different. This means that you need to decide whether each loan will offer you good value for money rather than thinking only about how the costs compare. Obviously you will still need to make sure that you will be able to afford the loan and repay it on time.

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