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Comparing Lisburn Payday Loans To Other Forms Of Short-Term Credit

Lisburn residents who need short-term loans may wish to compare Lisburn payday loans to other borrowing options. Payday loans usually allow the borrower to obtain a small sum of money, such as two or three hundred pounds, repayable when the next pay cheque is received.

Payday loans tend to be taken out by people who do not have easy access to other kinds of credit. This includes many people who have poor credit ratings. Those who have a good rating will not normally get good value for money from payday loans. An authorised overdraft from a bank will usually be considerably cheaper than payday loans for these people. Borrowing cash on credit cards can be expensive, but many cards do not charge interest at all on purchases, if the balance is fully paid off on the due date. This obviously provides a form of short-term borrowing which compares very favourably to payday loans.

On the other hand, those who do not have a good credit rating, will not be able to access the best value forms of short-term borrowing. For these people payday loans can be better value than options such as an unauthorised overdraft, or paying bank charges on bounced cheques.

It is important to realise that payday lenders are providing a service which is intended for those who need to borrow money over the short term. Those who are unable to fully pay off payday loans on the due date can quickly find that they have lost a considerable amount of money in fees and interest.

Many payday lenders are members of the Consumer Finance Association. Members of this trade body have undertaken not to lend to those who are unable to repay the debt on the due date, and not to target those who have debt problems.

Those who are unable to access short-term borrowing options such as authorised overdrafts, or credit cards, may be limited in their choice to payday loans, pawnshops, credit unions, borrowing from family members, or borrowing from a loan shark.

Out of these options it is clear that no responsible person can ever recommend borrowing money from a loan shark. Loan sharks often use physical violence or sexual blackmail to enforce payment. Borrowing money from a family member has certain advantages, including the fact that the loan is quite likely to be interest-free, and repayments can be flexible. There are disadvantages however, including the embarrassment of asking for the loan, and the strain on family relationships if the loan cannot be repaid.

Credit unions often can lend money to people with a poor credit history, and they often charge quite low rates of interest. For many people the disadvantage is that they will usually require the borrower to have been a member, and a saver, for some time, before they will consider lending money to that person.

Pawnshops offer a method of short-term borrowing, usually secured on household items, electronic goods, tools, or jewellery. This form of borrowing is very easy to access, but a major disadvantage is that the pawnbroker will usually value the object being used as security at much less than its original cost price. This makes borrowing from a pawnshop a particularly bad choice if the loan cannot be repaid on time, and the security is forfeited.

Lisburn payday loans are just one of the options available to those people who need access to short-term credit. In general the payday loan option appears most favourable to those who are excluded from other forms of credit such as an authorised overdraft facility from their bank.

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