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payday loans uk
payday loan companies
traditional bank loan
short term loans
positive affirmations
income earners
payday loans
ordinary man
pyramid schemes
sum of money
insurance companies
Payday Loans Uk – A Growing Monster Day By Day
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Payday Loans Uk – A Growing Monster Day By Day

A payday loan is a basic loan process involving a lender providing a short term unsecured loan to be repaid at the borrower’s next pay day. Payday loans in the UK are becoming prevalent in this territory and there are pros and cons to the entire idea of this scheme.

Looking at the positive side, this scheme has helped (especially) the low income earners as they are able to borrow money for immediate use before their next pay. The process is also simple and it lacks the complexity of the traditional bank loan system.

However, these are just the few positive affirmations that one can credit these schemes for. The rest is a roll down the hill. It has actually been argued that payday loans in the UK have been the main reason for people staying in debt all their lives. The deal may sound sweet but the interest rates are very exorbitant thus taking so much from the borrowers. The borrowers may even end up paying double that which they borrowed.

Also, this kind of scheme kills the concept of saving. Instead of people saving their money in insurance companies, banks and even pyramid schemes, they tend to use it without necessarily having a budget having the option of payday loan systems in case they run out of money. It is for this reason that people using this system will forever remain in debt.

Payday Loans In The UK Becoming An Alternative For Citizens

Payday loans in the United Kingdom have become an easier option for most citizens. They have outsmarted banks, insurance companies and so forth in terms of appeal in the eyes of the ordinary man. Payday loan companies are therefore spread across the entire territory offering short term loans on a short term basis to individuals in need of them. This form of service has also gone as far as offering online services making it possible for everyone to access its information and services.

When compared to the traditional bank services, this scheme is much faster. Once an individual applies for a payday loan, the sum of money will be in his or her bank on the same day. However, when it comes to banks, processing a loan is one long story. There are too many formalities to be followed even with the risk of actually failing to secure the loan. Also, no form of security needs to be attached when it comes to payday loans except the individual’s pay slip. Banks on the other hand need one to attach an asset that is equivalent or supersedes the amount of money borrowed. These are the reasons that make payday loans in the UK common as compared to the traditional bank loan systems.

One may then compare the payday loan system with the insurance industry. Premium paid to insurance companies are meant to insure the policyholder in case of the occurrence of a particular risk. However, one is not certain as to the occurrence of the risk especially if one is a general policyholder. Payday loans UK therefore may serve this purpose especially for low income earners. Whenever there is an emergency, they can easily take out a loan and pay it back instead of paying premium for a risk that has not occurred and may never occur.

Payday loans in the UK are also not too good a deal for the lender himself. Statistics show an estimate of 10% to 20% of persons defaulting in payment therefore raising bad debts on the lender’s side. It is also incurable as the lender has no asset that belongs to the borrower which he or she can sell to redeem the sum owed.

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