If you're struggling to make ends meet, then you've probably started considering a payday loan. While these financial products serve a pretty pressing need, they are often incredibly bad value, and can exacerbate the problem if you don't use them properly.
With this in mind, we suggest they only be used as an absolute last resort, but if you have to get one, then go into it with your eyes wide open with our brief guide to payday loans, and what to watch out for.
Payday Loans are a short term loan, often for a term of 31 days max, between £100 and £1,000. They can help to bridge the gap until your next pay day, and the idea is you'll pay them back when you get paid.
This is the idea, and if you follow it to the letter of the law, you should be fine. However, the interest on payday loans is absolutely crippling. With high rates of interest often doubling the initial loan if left unpaid over the course of a few months. Therefore, it's VITAL that you pay the loan back as soon as possible.
To highlight our point, the cheapest £100 to £300 payday loans at the time of writing charge an annual interest rate of 1286.1%. This is a staggering amount, and serves to highlight the incredibly bad value of these loans.
We also suggest researching the payday loan provider you are going with before taking out the loan, see if there are any testimonies about the company online, so you know they are reputable.