UK Payday Loans on the Rise in January

Jan. 2, 2013 - PRLog -- Just a year ago, one of the UK newspapers has reported that many people were using payday loans to cover everyday purchases and loan repayments. January is generally the month when the majority of people are short of cash and need some extra help. Even those who carefully budgeted for Christmas are running out of money by the end of the month, and this results in the rise of cash loan agreements. Find out why this pattern can be dangerous for a family’s budget.

Paying for the Mortgage

When people are struggling with the mortgage, refinancing is a better option than living day by day. For some, however, getting a remortgage offer is very hard, due to their credit rating. That is why they are surviving on cash finance. The only problem is that when they fall behind on the payments of these advances, they will get into a serious trouble and the interest starts accumulating on multiple levels. They will be charged late fees on the mortgage, credit card and payday loan, adding to thousands of pounds and resulting in a great financial trouble.

Lack of Guarantee

As cash loan providers are not looking for guarantees at certain times, people are able to take on finance without a solid background. If one’s benefits stop, they will be unable to pay back the loan and the interest will build up very fast. In many cases, the most vulnerable members of the society turn to these lenders just to discover that they can’t find the right solution by living from one week to another without budgeting.

Catch 22 of Payday Loans

The problem with cash loans in the UK is that people are relying on them too much. They are designed for emergencies, but lenders are communicating otherwise. Although people are now told how much they have to pay back on an agreement, they are not fully aware of the costs involved in case they miss a payment or are late.

Clever Ways to Use Payday Loans

Some people consider their true financial situation when applying for payday loans. Especially in the January sales, many of them are taking advantage of the discounts using cash advance. It is a good solution if the amount of saving is significantly higher than the cost of the money and one has the security to pay the money back in time. Find out more about the best ways to use payday loans at: http://solvemybadcredit.co.uk/emergency-funds-to-raise-fast-cash-after-christmas/

Read our blog for more budgeting and finance tips. http://solvemybadcredit.co.uk