The For and Against Dilemma

Though the cash loans have attracted negative fame in the recent years, the fact remains that they had been helping those in need by providing easy access and instant availability to cash. The payday loans as offered by MoneyTreeInc have proved to be the helping hand in the darkest hour of need for the millions of employees in UK. Statistics suggest that the number of people opting for payday loans has increased dramatically, almost four times in the recent years. As estimated by the Consumer Focus, the number of people who took out payday loans was £1.2 million in 2009, the amount being £4.1 million as opposed to a figure of £900 million in 2008.
Despite the negative publicity it continues to attract, the payday loans are forecasted to hit an increasing number of users over the years. The economy being in turmoil, people always find payday loans helpful to meet their cash requirements instantly. However, there are always the unfavorable outcomes that come in the package along with the good ones and you must know them before you seek a payday loan.

The For Dilemma
There are many reason that contribute to the favor of the payday loans, and hence its popularity and increasing usage. The following are some reasons that might explain into more detail.

  1. Payday loan is a fast and convenient method to obtain cash. Coupled with this, the application process is integrated into an online system and the applying will just take a few minutes of your time. The authorization and transfer of funds take place within the same day.
  2. There are minimal requirements that need to be met. All you need to be is of 18 years of age, a resident of UK and have a steady employment record.
  3. There is no such requirement as long formalities. You can apply for a payday loan even with a bad credit history and still enjoy the benefits of the payday loan, not available in other loans.
  4. The lower amount of loan offered has further implications of a shorter period of repayment terms. Unlike the conventional loans, the load will be repaid in less than a month and hence the ease of getting out of debt without difficulty.

The Against Dilemma
Just as there are always two sides of the story, so is the case with the payday loans. The following points detail the unfavorable outcomes of a payday loan.

  1. Payday loans have a high rate of interest. If not repaid as per the terms of the loan, the average APR of around a figure of 1700% can be applied. However, considering the short term and the ease of getting them, this seems like a small price to pay for many.
  2. If you fail to repay the loan on the agreed time, the lender will be authorized to report you, penalize you or to renew the terms of the loan which will also mean a higher borrowing cost and maybe fee as well. However, that is true when you are dealing with any credit agency.