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 - The Disadvantages
First and foremost, the cost of cash advance payday loans has to be seen as their biggest detractor. But, if you have no other options, this unfortunately, is unavoidable.
Another big minus as far as payday loans are concerned, is that people who don't manage their finances responsibly can easily become stuck in a vicious cycle of borrowing. Because they used a payday loan last month and have had to repay it, they don't have cash this month and consequently end up borrowing again, only to continue repeating the process into the future. Some payday loan providers are quite responsible in this regard and are only prepared to advance to you as much as 50% of your upcoming pay cheque, thereby ensuring, to the best of their ability, that you will have enough funds to see you through to the end of the next month after having repaid your payday loan.
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