Instant payday loans command massive annual interest rates, because you’re not supposed to have them for more than one month. The actual interest you pay, provided you clear the whole loan in one month, is a percentage of the annual interest rate – and can quickly grow to epic proportions if you roll the loan over into subsequent months.
As such there are very specific sets of circumstances in which instant payday loans are relevant products. If you have an emergency at the end of a month, but have not yet been paid, and (and this is the crucial part) can easily budget the full cost of the emergency out of the coming pay check without getting into difficulty, then the payday loan can be a quick and easy solution.
If, however, the cost of taking a full payment for the loan, plus interest, out of next month’s wages means you’d have to look for more instant payday loans or similar to get through that month, then financing is not for you. In this case you should seek independent financial advice, explore alternative options such as speaking to family and friends and ultimately be prepared to consider personal insolvency.
What are the alternatives
If you own property, that can provide another solution to short term money worries. Some lenders will provide quick homeowner loans today against the value of your property. You must own the property outright, in some cases – in others, the loan is advanced against the portion of the building you already own (the equity), so you effectively reset your mortgage.
Be aware that if you apply for quick homeowner loans today against part ownership of a property, you’ll be factoring the monthly repayments into your finances in addition to your mortgage. Whereas, if you have already paid off your mortgage, your homeowner loan become a monthly payment figure with no competition from similar outgoings.
The homeowner loan is advantageous in more circumstances than instant payday loans. Getting quick homeowner loans today means potentially taking your pick of some competitive interest rates, set by companies who want to attract secure borrowers to their products. You can also borrow a lot more through a homeowner loan – up to the full current value of the home that you own.
Something to remember: You should of course be aware that if you’ve paid off a mortgage and then take out a homeowner loan, this must be paid back in full before you die or the property may be taken over by the lender – so you will have no physical estate to bequeath any dependents and survivors.
As with all financial products, it’s important to know what you’re getting into. Do your research and take independent advice before you sign anything.