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What are next day loans

If you need money fast, next day loans offer you the chance to borrow funds and receive them within 24-hours. These type of loans are short-term, and are only designed to cover a person's expenses until their next payday. These type of loans are sometimes called wage advances, and they are subject to strict lending regulations from the Financial Services Authority.

Every lender, from the largest bank to the smallest payday loan company has to abide by the responsible lending regulations laid down by the Financial Services Authority. This means no lender can offer a loan to a person they believe will either not be able to pay it back or who would face financial hardship paying the loan back. This law is intended to stop people over-borrowing. There are also regulations on next day loans or payday loans that cap how much interest a company charges. Laws in place state a company can charge unreasonable interest rates, although this does not prevent some interest rates for next day loans being as high as 75% APR.

Next day loans have received a bad press from many of the larger financial institutions, who believe they encourage a person to be in constant debt. While it is true the average payday lender takes out six loans before the amount is finally paid back, they can be useful if used properly. Firstly a person should never borrow more than they can afford to pay back. When applying for next day loans, you should only apply for an amount you know you can comfortably pay back. When your repayment date arrives, do not be tempted to defer your loan, instead clear it off in full.

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