Top four myths about payday loans

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Payday loans offer individuals a unique way to meet emergency needs. However, many people refrain from taking these loans as there are so many myths about them.

  1. Payday loans trap borrowers in a circle of debt

Payday loans are meant to be short-term measures to help you during a financial emergency. In fact, these unsecured loans have helped thousands of families in the UK when they need money urgently to pay for bills, car repairs or home repairs. Payday loans direct lenders do offer a rollover service (limited to 2 rollovers) to prevent borrowers from being saddled with a long-term, high interest loan.

  1. Payday loans lenders are loan sharks

If you take payday loans from reputable payday loans lenders, there is no question of the lender taking advantage of you. You can find reliable and trustworthy payday loans direct lenders at allthelenders. It is the UK’s first price comparison site dedicated to the payday loan industry, and it is authorised and regulated by the FCA. The allthelenders website offers independent comparison results that allow borrowers to make an informed borrowing decision.

  1. Payday loans target vulnerable borrowers

Most borrowers who opt for payday loans are employed with a steady source of income and maintain an active bank account. These are prerequisites for getting approved by the lender. In case you didn’t know, payday loans are meant for working adults who face a financial emergency that cannot be fulfilled by credit unions or traditional banks.

  1. These loans have hidden fees and high interest rates

In the UK, the law requires payday loans lenders to disclose interest rates, application fees and other applicable fees. Yes, payday loans have higher interest rates compared to traditional loans, but let’s not forget that these are unsecured loans that do not require collateral.