Short Term Loans Explained
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Short Term Loans Explained
What is a short term loan or payday loan?
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Step by step guide to applying for a payday loan- Step 1

Step by step guide to applying for a payday loan- Step 1 | Short Term Loans Explained | Scoop.it

Before you apply for your loan, visit a number of payday and short-term loan providers' websites so you can make an informed choice about which lender is best for you. Because the majority of loan providers work exclusively online you can do this at any time of day or night from the comfort of your own home.

When you have chosen your preferred loan provider go to their loan application page, which is normally a single page online application.

You will need some basic information about yourself, the place you work and your banking details to complete the application.

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Payday loan calculator

Payday loan calculator | Short Term Loans Explained | Scoop.it

Most payday loans carry a fixed flat rate fee with no hidden charges or administrative costs.You can apply for any amount between £80 and £1000. There are no hidden charges or administrative costs.

For every £80 borrowed payday lenders charge an average of £20. Note this will depend on the lender that accepts your application.The calculated APR% will depend on the duration of your loan and presented to you when you apply.

 

E.g. Representative 1734% APR:Paydaykong

 

Comparing loans can be difficult and confusing with the different types of payment amounts and repayment lengths. The finance industry is required to use APR (Annual Percentage Rate of charge) to make comparing loans simpler.

APR does work well when you compare long-term loans like those from a bank or building society because they are based over a 12-month term or longer. But the use of APR can make shorter-term loans can look quite high at first glance and less favourable in comparison.

This is because traditional lenders do not include things like fees and late payment charges in their APRs, which can make them, appear much lower than ours. Also, unlike ordinary short-term loans, credit on cards can be subject to interest rate changes while you're still paying back the balance.

Representative Loan Example:

If you borrow £300 for 30 days

The amount you payback will be £375

The interest will be £75.

The Interest rate is 1734% (variable rate)

So while the payday lender's APR may look higher than other lenders you should remember:

They won't charge you extra admin fees

The fee is fixed so you always know where you stand

There are no hidden charges

 VISIT www.paydaykong.com to calculate your loan today!

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APR on Short term loans or Payday loans

APR on Short term loans or Payday loans | Short Term Loans Explained | Scoop.it

APR measures how much a loan or other line of credit costs you in interest over one year and is expressed as a percentage of the total amount of money that you borrow.

If you want to work out the APR you pay on a loan first take the amount of your loan and how much interest you will be charged over one year. Then divide that interest amount by the amount of your loan. Multiply the number by 100 and you get your APR. For example, you borrow £1,000 and are charged £80 in interest for that year. The APR is calculated like this:

80/1000 x 100 = 0.08 x 100 = 8%

Normally you know what the APR is before you know how much the interest you will be charged is, so you can determine how much your interest over the course of a year is by using this formula:

1000 x 8% = 80

The Consumer Credit Act 1974 requires lenders to include the APR in all credit agreements, including loans that are for a relatively short period. They must display their 'typical' APR in advertisements and the APR can vary from lender to lender as well as across the different products they offer.

Banks, Credit card companies, payday loan companies and other lending institutions are required by UK law to clearly illustrate their own APR rates. So you can compare one APR to another and find the best rate.

Lenders can also advertise their current APR in monthly terms instead of in annual terms. This is why you see APRs for as low as 2% per month. When you apply for a line of credit, the lender must tell you what the actual APR is. So if the monthly APR is 2%, the annual APR equals 24%.

It is important to know that not everyone will qualify for the 'typical' APR advertised. The actual APR charged might be determined by your credit history, income or other criteria the lender applies.

Short-term and payday loans are usually for just a few days or weeks, the APR sum not only multiplies the actual period of interest up to a year's duration, but also compounds it, assuming interest-on-interest many times over. The result is a distorted number that bears no relation to the actual interest involved.

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Payday Loans Survey Results from PaydayKong.com | Pay Day Kong Blog

PaydayKong.com customers feel a payday loan is a reasonable response to a financial shortfall…

The results of our latest PaydayKong.com customer survey indicate that an increasing amount of people now see payday loans as a viable alternative to more traditional high street lenders.

Millions of Britons are likely to take out a payday loan in the coming months, as people from all walks of life struggled to make their money last until payday. Our survey shows that 36% of respondents felt that taking out a payday loan was a reasonable response to a shortfall in their finances, while a further 39% felt just a little embarrassed about it.

People who apply for a payday loan in the UK have various reasons for taking out this type of short-term loan. 27% of our survey respondents told us that they needed the loan to pay for essential household bills like gas and electricity. While another 24% told us the money was needed to keep their cars on the road. A further 13.5% needed the additional funds for family shopping and food.

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The rising popularity of payday loans

The rising popularity of payday loans | Short Term Loans Explained | Scoop.it

If you find yourself in a tight financial situation and you need cash immediately there are a number of solutions you can look in to. But if borrowing from a friend, relative, a bank or other high street lender isn't an option there are other innovative ways to find the money you need.

An increasingly popular way to borrow cash in an emergency is a payday or short-term loan. These loans typically range from between £80 and £1000 and the cash can be used for any purpose.

Although payday loans are a relatively new way of borrowing cash in the UK they are the fastest growing way of borrowing money in the world. In the UK, over 4 million people, from all walks of life have taken out a payday or short-term loan and the number is increasing all the time.

The majority of UK payday and short-term cash lenders have simplified their application processes and offer almost instant approval. So customers know straight away if they have been successful. The loan amount can then be deposited in to a bank account on the same day of the application.

A payday or short-term loan can be a convenient way to bridge a financial gap and can offer greater flexibility than the banks and other high street lenders because money is made available to people with all types of credit history - good and bad.

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What is a payday or short term cash loan?

What is a payday or short term cash loan? | Short Term Loans Explained | Scoop.it

Payday and short-term loans are a type of credit typically used by people who are facing a temporarily difficult financial situation. Loans normally range from between £80 and £1000.

They are an alternative to borrowing money from a bank or building society, where you would normally have to answer a long list of questions and provide detailed personal and financial information as well.

Payday and other short-term loans can be used for almost any purpose. The most common reasons are to cover the cost of car and household appliance repairs, travel expenses, avoiding overdraft fees and other charges and to pay unexpectedly high bills.

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