Why Payday Loans In The UK Are Better Than US Payday Loans
Payday loans have become a popular choice for borrowing small amounts of money over a short period of time. Surprisingly payday loans in different countries are quite different. In fact getting a payday loan in the UK is better than a US payday loan.
Payday Loans For Emergency Relief
Payday loans were designed for those emergencies that occur. Your car breaks down 5 days before payday or you or perhaps your hydro bill needs to be paid or it will be cut off and you can get a payday advance. The trouble is payday loans have actually replaced good budgeting and too often a person finds themselves caught in a vicious cycle of poor budgeting and these payday loans are no longer emergency loans. Be careful how you use them.
Other Names For Payday Loans
Payday loans are marketed under many different names including short term loans, cash advance loans, check advance loans, and deferred deposit check loans. What all of these loans have in common no matter what loan name they are called by, is that they are for a very short period of time – from one payday to the next - thus the name payday loan. They are approved quickly and the amount depends on your earnings but generally ranges from £50 to £1000 in the UK and $50-$1,500.in the US. There are many financial institutes that offer payday loans.
Paying Back Your Payday Loan
In both the UK and US you are required to pay the loan back on your next payday. It’s amazing just how much more flexible the UK payday loan is over the US. In the US the borrower will usually write a personal check made payable to the lending institute. The lending institute then provides the borrower with the amount of the check in cash less the fee charged for the borrowed amount and loans range from 7 to 14 days. However in the UK these loans can go a month until they are due because monthly pay periods being so common. The UK also has a fast payday loan compared to the US.
In the United States rollovers are very popular. That means when your loan becomes due the following payday you roll all or a portion of it into a new loan and pay an additional fee for that privilege however rollovers are not nearly as popular in the UK. These rollovers are very expensive and even when they are offered in the UK the interest rates are calculated in a much more favorable way.
The Cost Of Borrowing
In the US these loans are very expensive. For example let’s say you borrow $500 for 14 days you would have to write a personal check for $75. You could almost call those loan shark rates. And although still high in the UK they are actually about half of what they are in the US. When you get your payday loan online the cost of borrowing is disclosed.
The Truth In Lending Act requires the cost of the payday loan to be disclosed and you must also receive a writing document with the dollar amount of the finance charges as well as the APR.
Qualifying For A Payday Loan
One thing that stands payday loans from other loans is how quick they can be approved. A quick payday loan can be approved in under an hour where as a regular loan can take a couple of weeks. In the UK anyone that has a regular paycheck that is deposited directly into the bank with access to either a debit card or check book, is able to get a payday loan in a day or less.
In the US you must meet the following criteria to get a payday loan:
1. You must live within the United States.
2. You must have full time employment and have been with the same company for 6 months.
3. You must be at least 18 years of age
4. You are paid weekly.
5. You must earn at least $1000 US a month
In the UK you must meet the following criteria to get a payday loan:
1. You must live within the UK, Wales, Northern Ireland, or Scotland.
2. You must have full time employment
3. You must be at least 18 years of age
4. You income must be at least £300 each payday after all deductions and taxes.
5. Must have a bank account that is at least 6 months old
Check Guarantee Card
In the UK some institutes offer a check guarantee card. If you have such a card your payday loans are instantly approved. Interest rates vary between vendors but one thing is for certain the cost of borrowing is much lower in the UK then it is in the US. Even if you are going to get a guaranteed card the first time you need to:
1. Fill out a short application. If you are applying on line it takes only a couple of minutes.
2. Provide your most recent pay slip
3. Wait for your information to be verified
4. You receive your approval and the money is deposited into your account for a quick payday loan
UK Payday Loans Are Better
Each year payday loans grow in popularity but it’s very apparent that if you live in the UK and need the services of a financial institute providing payday loans you are in much better shape than those in the US that require a payday loan.