Recently, a lot of people have been getting payday loans so that they can pay for their housing, deal with a sudden emergency, or even pay for their weekly food shop.
Money and Pensions Service says that while short-term loans can sometimes seem like the only option for people who need money right away, there may be more affordable options. It brings together the services of the Money Advice Service, the Pensions Adviser Service, and Pension Wise into one place.
If you need to borrow a small amount of money for a short time or looking for quickquid? How can you do that? That’s assuming that there aren’t any other options, like getting a loan from your family or friends or asking your boss for an extra payment.
Overdraft That Is Approved. Designed for short-term borrowing, but the costs can be very different. Some banks charge fees every day, others every month, and some charge interest. Some use a mix of these, and some use all of them at the same time. However, many banks are already changing their prices before new rules come into effect in April 2020, which are meant to make overdrafts easier, fairer, and cheaper.
Credit union have long been said to be an important alternative to payday lenders. They can be a good deal for people who need to borrow small amounts. The maximum they can charge is 3% a month. Some charge less. If you took out a loan of £250 from London Mutual Credit Union for a month, you would pay back £257.50. That’s £7.50 in interest, but paying on the same day costs you an extra £11. But it may not always be easy to join a credit union and get money right away. Some credit unions may want you to save money first.
People Who Lend Money On Short-Term Loans. There are still a lot of payday lenders out there looking for business, but they can be very pricey, too. It would charge you £62 interest if you took out a £250 loan from Peachy for one month. That means you’d pay back £312.
Other Lenders, Too. With a company, you pay a fee to join, and then you can borrow £250 twice a year for free. When you get a £250 loan, you pay it back in four monthly instalments of £62.50, along with your £6 monthly fee. The cost of credit is £72 a year, but that’s not all.