Are payday loans expensive credit?

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When you compare payday loans to traditional loans, they are indeed expensive. However, most borrowers forget that payday loans are unsecured loans; payday loan lenders don’t ask borrowers for collateral. Also, payday loans become an expensive proposition when you begin treating them as long-term loans.

Be a smart borrower

If you delve into stories of people who have got trapped in an endless cycle of debt, you will realise that many of them may have just themselves to blame. Such borrowers do not plan their budget properly and therefore don’t clear their payday loans as soon as they should. They may end up rolling the loan several times before clearing the borrowed sum and interest levied on it.

When you roll over payday loans, the interest keeps compounding, and this substantially increases the cost of taking the loan. On the other hand, if you make an effort to clear payday loans on time, the situation will never get out of hand.

Take a payday loan in an emergency

If you need payday loans every month to tide over day-to-day expenses, you are not managing your finances properly, and this will get you into a financial mess. A payday loan should be your option when you have a cash flow problem in an emergency situation, and you should be able to repay the borrowed amount, including interest, the next payday without feeling the pinch.

In the UK, online payday loan lenders have made it easy for borrowers to get access to quick and affordable loans. However, you should compare payday loans and opt for the cheapest deal. This will save you money, even if the saving is just a few pounds.

allthelenders is the UK’s first comparison site dedicated to payday loans. The site is regulated and authorised by the FCA. It allows borrowers to compare payday loans using a range of comparison parameters so that they can get the best deal from direct payday loan lenders. The allthelenders website ensures 100 per cent independent results so that borrowers can make prudent borrowing decisions.