Same Day Loans: A Quick Overview.
Same day loans have become extremely popular worldwide and UK market is one of the most booming markets for this variant of financial product offered by banks and other financial institutions. The concept was born US and then it went viral. US market is the most saturated and most stringent market for the same day loans but as far as UK market is concerned, this concept – despite its enormous popularity and behemoth growth – is in a nascent stage. What makes the UK market so plump and juicy? It is nothing bit the absence of regulative and corrective laws for governing the supply end and ever increasing inflation leading to financial crisis for customers in the demand side. It is the basic demand-supply equilibrium that is driving the market for same day loans. Here is the list of other names for this loan type:
Short term loans.
Bad credit loans.
No credit-check loans.
Same day loans or payday loans have several characteristic features. These features are nowhere even close to the features of long term loans like mortgages. Here is the exhaustive list of all features of payday loans:
- People with bad credit ratings can apply for these loans.
- Creditors will not conduct any credit checks.
- The two basic requirements in order to qualify for these loans are: the applicant must be a job holder with a monthly salary and the applicant must have a bank account where the money will be sent.
- Loan applications are processed the same day and generally within a few hours.
- Money, upon loan disbursal, is credited directly to the bank account.
- The loan amount must be repaid to the creditor when the debtor receives the next salary paycheck.
- The APR or the Annual Percentage Rate for same day loans are very high and can be as high as 35% or more. This means, a person borrowing £100 will have to repay £135 pounds on the next payday. This rate of interest or the APR varies from one lender to another and can fluctuate either in upward direction or downward direction. No matter what the APR for same day loans will always be higher than any other loan product sold by the creditors.
Who takes out these same day loans? Those people who need some instant cash instantly take out these loans. For example, in case of a sudden medical emergency, one may need some extra cash to cover hospital expenses along with medicines. In case of shortage of money, they can apply for same day loans for instant payment of medical bills. Also, those who have a bad credit rating and plan on taking out any long term loan will need to first repair their credit history because, lender will not approve long term loan applications because of bad credit. Same day loans or payday loans are excellent vehicles for repairing the credit ratings. Frequent use of these loans with timely repayment will improve the credit records for those who have bad credit history.