Payday loans or also known as short-term loans are usually a small amount of money (£300.00 to £500.00) offered by non banking institutions or so called lenders to individuals on high interest rates for a short period. They gain more and more popularity among people as they are easier and quicker to be obtained than the traditional banking loans.
They are also known as cash advances and their main purpose is to cover the borrower’s unexpected costs that often occurred between paydays. It is very important to remember that these types of loans are strictly designed for short-term (30-40 days) usage and are not appropriate for long-time borrowing due to their high interest rates.
The basic of payday loans follows the model of applying online from the lender’s website for short-term loan (usually 30 days), quick decision by the loan provider and getting the desired funds into your bank account if your loan application has been successful usually the same day. The borrower must repay back the full amount of loan with the interest at his next payday.