Quick loans in the UK is a tempting offer to get a lump sum of money fast. However, there are some drawbacks and you need to be very sure of what you are doing and if you can pay the loan back within the time limit.
If you can’t you run the risk of a financial downward spiral if you are unsure or can’t make the payments in time. So, here is all you need to know before taking out a quick loan in the UK.
What are they and when you might need them?
Quick loans UK, or payday loans, are loans designed to help you get to the end of the month. Money is deposited into your bank account, and at the end of the month, you are required to pay it back alongside high-interest rates and charges.
You may want to take out a quick loan if you have had unexpected bills to pay and payday seems too far away. But you need to be sure you can pay it back at the end of the month.
What do I need to apply for a Fast Loan?
You can apply for a quick loan UK if you are over 18 years of age, have a stable job and bank account. You can either apply with or without a guarantor (a person who pays the loan in case you cannot) and in most cases, you will require a credit history check. This would be done by the lenders. Although most will advertise that none is needed.
What happens if I cannot pay back my quick loan?
At the end of an agreed period of time, usually the end of the month or payday, the lender will take the sum you owe, plus interest and charges directly from your bank. This is known as a continuous Payment Authority’ or PA’. If the money is not in your account the lender will carry on taking the money from your account until it is paid, and late fees can be added. The longer you take to pay the loan, the higher the interest will be.
The financial risks of quick loans?
There are many risks when it comes to payday loans in the UK. You can enter a financial spiral that is very complicated to get out of. Once you are late on one payment, the fees applied could cripple your bank balance and therefore you are unable to pay the next installment and so on. Interest rates are very high, so make sure you know how much the total amount taken from your account will be and ensure you will have it.
Are there any benefits to quick loans the UK?
Fast loans are incredibly easy to apply for, they are fast, and you are more likely to get accepted. You can borrow a comfortable amount too. This makes them very attractive to people in financial troubles. However, if you are financially stable, but need an extra sum to help with an emergency, they can be very useful. You need to be careful with quick loans though, even if you are financially stable. Make sure you can pay it all off at once to avoid further charges and issues. If you can, seek an alternative.