Payday UK Loans – What Are They?

Payday UK loansIf you are looking for a small personal loan, then you will likely get disappointed. This is because your social circle will not be able to provide you the loans and the banks believe that small personal loans are a waste of time. In such a case, people who need a small amount (of up to 1500 pounds) are often left in the middle of confusion and they are generally not able to secure the required amount of money for themselves. This is especially true in the case of salaried class people. They have to live from paycheck to paycheck and have little to no savings. This is usually because they are not left with enough money to be saved. As a result of this, they have nothing when a real financial emergency arrives.

The payday UK loans can help you in this case. As the name suggests, these loans have to pay back after 6 months. This means that you can get a loan today and give it back 6 months from now. These are small, unsecured and medium term loans and can be provided for a maximum of 3 years. If you want money on the 15th of a month, you will get it that day itself. You will have to return it after 6 months. Most of the payday UK loan companies will be transferring the amount of loan to your bank account and will be deducting the same from the bank account only. There is no cash transaction involved in this case. Though you will be sacrificing some money 6 months from now, you will certainly be getting a good loan at the time of need.

The payday UK loans generally have an APR of 12%. In case you are unable to make the payment on the due date or in case you are able to make only part payments, you will also be eligible for an extension in payment. Usually, they add one more payment cycle, which is 6 months from now. However, the rate of interest goes higher for the extension.

(*) Note:

All the loans that we review or recommend all have:

  • Minimum period of repayment: 6 months. We do NOT recommend taking any loan with repayment period of less than 6 months, as you will have difficulties paying back
  • Maximum period of repayment: 3 years
  • Annual Percentage Rate (APR): less than 12%. Any rate higher than this will negatively impact your finance
  • Below is an example of the loan mentioned in this article, with a loan amount of $20,000
Loan Amount $20,000
Flat Interest Rate 7.50% p.a. (Effective Interest Rate of 14.39% p.a.)
Tenor 3 years
Total Interest Charged for the Loan $20,000 x 7.50% p.a. x 3 years = $4,500
Loan amount + Total Interest $20,000 + $4,500 = $24,500
Monthly Instalment $24,500 / 36 = $680.56