A quick payday loan can be very handy in meeting a sudden financial crisis. To successfully apply for this type of loan a borrower needs to have a steady job and a functional bank account as payday loans are extended on the basis of salary.

To repay the loan the borrower needs to issue a post dated cheque or needs to arrange for automatic debit from the bank account to cover the loaned amount and the interest thereof.

In the event of cheque getting returned for any reason, there will be an extra levy of late charges and cheque bouncing charges besides a levy of additional interest. To avoid borrowers this type of situation, payday loan lenders extend the deferral facility where the repayment of quick pay day loan can be deferred by a certain period for a fee if funds are not available for repayment.

In order to convince lenders of job and salary you might be required to furnish bank statement or salary slips for some immediate previous months. However no credit check is done, thus people with steady jobs but bad credit ratings can apply and successfully get payday loans.

Now with Internet based application process, quick payday loans have become truly hassle free way of getting necessary funds. You just need to fill up an online form furnishing details of your employment, bank account and if you qualify on the basis of your salary and job, approval is granted within minutes and money is directly credited into the account within 24-48 hours. In some cases there is not even need of faxing the documents. Thus you can avail of no fax payday loans as quickly as in one day.

Online media abound with negative stories about payday loans like high fees, low amount and debt traps etc. But if there is so much wrong with payday loans, why are so many people turning to it to tide over temporary cash crunch?

In fact most of these stories are based on some myths surrounding payday loans. Let’s do some myth busting here so that people in need of emergency cash don’t desist from taking advantage of such a simple cash solution.

Myth #1 – High rates

If you take into account the annual rate, payday loans sure have high rates, but we are talking about just a few weeks’ time or less (till your next payday). For such short time loans, the rates you pay anyway average around 15 to 30 percent over three weeks’ period. In other words, if you don’t repay the payday loan in stipulated time and roll over repayment over a long period of time, only then would you end up paying really high rates. Not otherwise.

Myth #2 – Credit rating gets affected

Credit ratings can be affected negatively if you take excessive credit from a number of avenues. Since no credit checks are required to avail of online payday loans, there is no question of your credit rating getting affected.

Myth #3 – Payday loans create a cycle of debt

This is certainly not true as payday loans are very short term loans and there are legal limits to the number of deferrals. This prevents this short term loan to become high interest long term loan.

I hope some of your long standing doubts about quick and easy payday loans have got cleared with this myth-busting post. These were some of the most popular myths. I will tackle some more of them in my next posts.

Online payday loans are in fact great way to tide over any emergency cash crisis – no excessive document processing, no credit checks, and cash available in 24-48 hrs. The only thing one needs to do is be responsible and prompt in repaying the loan amount.

Faced with a cash crisis, one tends to think of only two options – either borrow from friends and relatives or approach the bank for a loan. While borrowing is embarrassing, banks may not be willing to extend you loans if you want a very small amount, if you want it in a tearing hurry and if you have bad credit history.

The other option is to go for a payday loan. But is that a good option? Let’s compare personal loan with payday loan a bit more closely:

Time of approval

It takes anywhere between 3 days to 10 days for the approval in case of personal loan while payday advance is approved within minutes of applying.

Ease of processing

You would need to furnish whole lot of documents such as income proof, identity proof, residence proof etc. to apply for personal loan. In case of payday loans, no documentation is necessary. All you need to have is a regular job, a valid bank account with a debit card and you must be over 18 years old.

You can apply on phone or online from the comforts of your home or office. Not even faxing of documents is required for online payday loans.

Credit history

There is no way you can get personal loan if your credit history is not up to the mark. On the other hand, credit history is no criteria for approval of payday advance. Thus for people with adverse credit rating, payday loan is the only option of borrowing money.

Tenure

The tenure of personal loan is longer (from 1 year to 3 or 4 years) while payday loans are very short term loans, lasting till about your next payday.

Interest rate

Annual interest rates for payday loans are on the higher side but since loan tenure is very short, actual interest paid does not amount to much.

Amount of loan

Amount granted is higher in case of personal loans.

Repayment

Personal loans are repaid through Equated Monthly Installments (EMIs) over the tenure of the loan. Once the agreement is in place, it becomes very difficult to alter repayment schedule. While in case of payday advance, repayment can very easily be deferred by some weeks after paying a certain amount of fees.

From above discussion it is clear that if you want monetary help on an urgent basis there is no better option than payday advance. TopPayDay.co.uk understands your requirements very clearly as we have helped over 1, 00,000 people since 2003. With us you can avail loan up to 750 £ within 24 hrs.