A payday loan is a high-cost short-term loan that is often borrowed as a quick fix for emergencies. These are unsecured loans. So, if you fail to repay the loan on time, your property will not be at stake. However, the interest rate may spiral and your credit score will be impacted.
As the rate of interest on such loans is high, it should only be borrowed if you have exhausted all other options of financing. Also, take out a payday loan only if you can afford all the repayments on time and in full. Therefore, make a concrete repayment plan before you consider borrowing a payday loan in the UK.
Did you know that payday loans are the most heavily-regulated area of lending in the UK? All that protection is there to make sure you get a fair deal and that you don’t get surprised with fees and charges you weren’t expecting.