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The Benefits Of Using UK Payday Loan Lenders

UK Payday Loan Lenders offer many people a cheaper alternative to bank overdrafts. Many of us are often surprised by a sudden change in our outgoings on any given month. A boiler may have suddenly broken down or a car might need an emergency repair. These unexpected occurrences can put a real strain on household finances. Whilst a person's income may be enough to cover the constant bills such as electricity and water sudden one off charges force many to go overdrawn at the bank.

The typical charge for going overdrawn can be up to 40 pounds along with a daily charge for every day the account remains overdrawn. This unexpected expense along with the bank charges can cause significant financial hardship for people on fixed incomes. The emergence if UK payday loan lenders has made it easier and cheaper for people to cope with surprises.

There are many financial institutions out there and they offer a more flexible and usually cheaper alternative to banks. Whereas banks have a fixed charge regardless of the length of time the overdraft is needed UK payday loan lenders can offer a charge by the day. This means that if a person only requires the cash for two days then only two days worth of interest would be paid.

This option should not be used as a long term financial income. These financial institutions offer a short term solution to a short term problem. The responsible lenders make it relatively difficult to obtain a loan to deter people from using the facility for frivolous means.

An application to UK payday loan lenders can be complicated. There is usually an online form to fill in with details of residence employment and income required. The vast majority of these institutions will insist on a credit check the first time a person applies. Employment and residential details for the last three years are required for a successful check.

Once the application has been completed further checks are usually required. These vary between the UK payday loan lenders but most will require proof of employment in the form of three months worth of payslips or bank statements. Many institutions will need to talk to the applicant over the phone before approval.

Once approved the individual can then choose the loan amount. The maximum loan amount will increase over time as a record of repayment is built up. The lender will also require the date of the next wage payment into the recipient's bank account. The repayment will be taken on that day either by direct debit or debit card transaction.

Many companies offer the option to defer payment for further months provided an interim payment is made. This payment would normally be paid on the date the original amount was due. Several UK payday loan lenders offer up to six deferments of a loan however this can be expensive as any interim payment will not usually be taken off the principle amount.

Although the interest rates look relatively high at first glance this option can often be cheaper than accruing bank charges. So long as the money is paid pack within the first month it can be a much more cost effective way of getting a person through a difficult financial situation. UK payday loan lenders are now forcing banks to rethink their high overdraft charges.

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