With the rising prices and falling economy, the standard of living of people has gone down. The prices of commodities go on increasing but the salaries do not increase proportionally. In such conditions, many people resort to taking loans for fulfilling their requirements – be it to buy a house, renovate their home, child’s education, luxurious vacation, marriage etc.

Taking advantage of the fact, almost all of these companies are spending big time and advertising on TV, especially in the prime time slot. Most of the advertisements show the life of the protagonist improving drastically after he/she gets the money. There is always an emotional touch to it, in order to appeal to the masses.
On one hand, this can be good as the consumer gets information about the different companies in this field. He can then compare different offerings and pick and choose what suits him the best. Most of these companies have a single USP (Unique selling point) for their product, which they highlight in their advertisements. This helps the common man gain more insight into what all points he must consider. It equips him with enough knowledge so that he can take an informed decision.

However, every coin has a flip side. These ads may portray a goody-goody feeling about taking loans and fulfilling your desires, without giving too much emphasis on the actual process of return. The truth is that, depending on the interest bracket you fall under, it will take you a good while to return the money to the company. You may have to compromise on other spending during that time. Also, these ads may evoke people to blindly believe in them and go apply for a loan, which they may or may not need and may or may not be able to repay. These ads need to be taken with a pinch of salt. Extensive research needs to be done and you must consider all your options before actually applying for one.

You cannot really blame the advertisements on TV. They are doing their job. You need to be vigilant too.
Whether these ads are good or bad is very subjective. The debate can go on!

With over 6,000 people having applied for a payday loan from the union London Mutual this year, credit unions popularity is increasing. London Mutual are allowing its customers to borrow between £100 and £1,000 with paying around 2% interest back a month. This is a lot cheaper than a payday loan, with some having APR rates over 5,000%.
To get one of these loans with London Mutual you have to live in one of the four boroughs in London, thought you do not have to have a credit rating to receive this loan. Other credit unions are expected to adopt a similar model next year.

This loan gives people the option to borrow money without having to have a credit rating and allows them to pay it back in an affordable and less stressful way. Currently, if you borrowed £500 from prominent payday loan provider Quickquid, then you would have to pay £150 worth of interest a month. Credit unions are currently limited to charging no more than 2% interest per month, so to borrow £500 over a month would cost just £10 in interest. This gives a prime example of how affordable credit unions.

The whole application process can be finished in under 10 minutes. Mr Chandrasekera said that applicants were given a fast service: “Our online payday loan facility is exactly the same as any other payday loan service. People can apply for the loan, get the decision there and then, and then get the money within a couple of hours.”

London Mutual wanted to make it as easy to apply for one of their loans as a payday loan but they do not have all the costly repayments, which makes payday loans so dangerous. It is hoped that these loans from London Mutual will provide an alternative to payday loans which will reduce debt.

Some industry commentators believe there are strict limits to the extent that credit unions could ever compete with payday lenders.

In this day and age there are so many people having to take out payday loans in order to survive and live comfortably and over the last few years there has been a steady increase in the number of people opting to take one out. Payday loans are usually short- term unsecured loans, of usually a small amount of money. People tend to borrow a small amount such as a couple of hundred pounds for a short time, in order to tide them over until their next wage and payday. Hence, why it is referred to as a payday loan. As with any loan, the payday loan is paid back with interest. How much interest depends on the payday company.Payday Loans

Payday Loans

Different people choose to take out a payday loan for one main reason. That is, because they are finding themselves in some sort of financial difficulty and see no other way around their financial problems other than to take out a loan. This could be because of an unexpected or urgent bill, for example, people might spend a little more out of their means for a birthday or at Christmas time and therefore payday loans become emergency loans. However, when people take out payday loans, they run the risk, as with any other loan, of falling into payday loans debt.

Payday Loans for Bad Credit

There was a time when these payday loans for bad credit never existed, and there were just your standard payday loans, which meant that for those people who have a bad credit history, for example, if they haven’t been making credit card or loan repayments on time, or if they have missed the repayments altogether, it tends to be more difficult for them to secure a loan and borrow money. They might even get turned down for one. However, if an individual has been given a bad credit rating or bad credit check, there are now payday loans for bad credit which are available to them. Payday loans for bad credit don’t discriminate if people have fallen into difficulties and have bad credit ratings. This means that even with a bad credit score, people can still borrow money, as they don’t do any credit checks and don’t ask any questions with regard to their credit history. That being said, lenders tend to be more strict when it comes to payday loans for bad credit, for example, there might be higher interest rates and shorter repayment times. Companies tend to do this because they can make their money from people who are struggling and have nowhere else to turn for financial help.

Payday loans debt

Even though people take out payday loans or payday loans for bad credit to help with their financial troubles, they’re not always a quick fix and can eventually cause even bigger problems in the form of payday loans debt. With both payday loans and payday loans for bad credit, there is always the risk that you will find yourself in payday loans debt.

Payday loans debt can easily spiral out of control quickly. This is mainly because they are only meant to be short- term, unsecured loans and therefore come with high interest rates and if they are not paid on time, i.e. the following month, then the lender will just add extra charges on top. If these payday loans aren’t paid within the first few months, and with the high interest rates, before they know it, the borrowers will find themselves in payday loans debt very quickly. This is why people find themselves getting into debt and then into even greater debt when they can’t pay back these short term payday loans.

How you can get out of a payday loans debt

Even if you find yourself in payday loans debt, it doesn’t have to be a catastrophe. There are ways to get out of such payday loans debt.

Firstly, if someone has taken out any payday loans for bad credit, they need to get themselves back into the good credit rating category.

The best way to begin is to set up a Debt Management Plan and figure out exactly how much is owed and then how much they can pay back each month.

Some companies will allow the interest to be frozen and charges may be stopped so that the monthly payments will go towards paying off the balance. This way, those debts can be paid off much sooner
Making a budget. This is the best way to avoid debt and indeed to deal with any debts.

Cut your expenses. Certain expenses such as travelling costs, meals out and so on can be easily cut back most of the time, and this way, the money that would be spent on such expenses will now go towards repayments