Use our UK Finance guide and learn by experience. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
Loans
Payday Loans - are they Expensive?
Part of the reason why fast payday loans are such costly loan facilities is because most people making use of them do have adverse credit histories and cannot borrow money from anyone else.This means that the users of payday loans are perceived to be high non-payment-risk individuals which consequently increases the cost of the facility. Another reason for the high price of payday loans is that they are such short-term facilities, giving instant payday loan providers a limited amount of time in which to make their money, although most people would believe this to be an unscrupulous reason for increasing the cost to payday loan borrowers. Lastly, as mentioned earlier, most borrowers making use of payday cash loans don’t have any other way of raising capital and this gives payday loan providers the upper hand. To an extent, one could say that fast payday loan providers can ‘name their price’ as they are, in most situations, a borrowers last resort.
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