Where To Find Emergency Cash

Sometimes the need for cash can crop up quickly. Emergencies, illnesses, and unplanned events do happen, and they happen to everyone, regardless of their credit history or debt status. For those who need cash up front, the payday loan provides a solution.

What is a payday loan?

The concept is really quite simple. Payday loan companies will take a post-dated cheque and advance you the cash, and then send the cheque to the bank on the day for which you have dated it. The amount of time you have to come up with the money depends on the circumstances, but standard advance time is up to two weeks.

Payday loans, also referred to as cash advance cheques and instant cash loans, do require a credit check, but very few people are turned down because of poor credit or bankruptcy. The only real requirements for borrowers are a current bank account and pay stubs to prove current employment in the UK. The amount you are allowed to receive in cash back will probably be affected by your credit standing. But for those whose credit prevents them from getting a standard loan through a bank or credit union, a payday loan can be the one source of emergency cash available to them. And for that, it should be recognized that the payday loan fills a huge hole in the market.

The fact is, payday loans do come with high interest charges and fees that many people consider excessive. But think of it this way: The loan company is taking a substantial risk on you, and they need to protect their investment somehow. This is not by any means "free money." Interest rates on these loans, when calculated as an annual percentage rate, can in fact number around 300% or more. The interest is generally calculated and added onto the total of your cheque at the time when you receive the cash advance. For example, if you borrow 100 pounds, you may write your cheque for 115 pounds. This would equal a 360% interest rate if calculated as an APR.

Payday Loan Charges

You can also expect some pretty heavy penalty charges if you do not have the money in the bank by the time the cheque arrives. You've made a promise to pay the cash back to the lender on that date, and if the cheque bounces you can expect collection fees to pile up quickly until you can make good. Having a payday loan cheque bounce will also decrease your chances of being able to use the services again, and it can create a definite black mark on your credit.

So for those not in control of their finances, and those who plan on juggling money from one source to fill up another, it's wise to stay away from payday loans. The only real answer for those kinds of financial emergencies is to straighten out your finances and spend only what you've got. Trust us- a payday loan is not for you.

But if your credit has suffered a little; if you're working hard to make ends meet, and you come up short on cash when you need it most, consider a payday loan. The convenience will cost you, but when it's a choice between emergency cash and a few extra fees, it can be well worth it.