Friday, November 09, 2007

Payday Loans

I seem to be seeing more and more sites advertising Payday Loans. A short while ago I didn't even realise what they were. Now I understand that they are a very short term loan which requires no or little credit checks and you can get a small amount of cash which you have to pay back when you next get paid. They are expensive compared to overdrafts and credit cards but if you have a bad credit rating or are maxed out on these options then it can provide a helping hand. As the cost of these loans is so high I certainly wouldn't recommend them unless you have an emergency to pay for.

It seems that we are getting more and more reliant on credit and these short-term loans illustrate that fact. I do take advantage of interest free credit and do have a mortgage but apart from that I try to stay away from loans. Firstly I find the burden of them massive and hate the thought of a debt hanging over my head - with a short-term payday loan this would not happen. Another thing I do not like is the amount of interest I have to pay. For example if I pay my mortgage back after 25 years I will end up paying back three times what I borrowed - I borrowed £100,000 and I will pay back £300,000. I could have bought 3 houses if I had not had to pay the interest! That is why I working hard to earn enough money to pay back my mortgage as quickly as possible. A payday loan forces you to pay it back quickly and this is a great habit to get in to.

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