Payday Loans in Spending

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Shops offering payday loans have popped up all over the high street, and are also easily accessible online. What are payday loans, and what should you watch out for? Find out here.

Payday loans are short-term loans that you can get in return for giving the loan provider a pay slip or proof of your income. The loan is basically an advance payment of the wages you are expecting in your next pay slip.

A payday loan is a way of getting money if you need it quicker than you normally would, or even immediately, however the interest rates associated with payday loans are extremely high. This means borrowing even a small amount, and paying it back even a little late, can lead to your your debt increasing rapidly.

Things To Know About Payday Loans

  • Interest rates are much, much higher than you would pay for a standard bank loan.
  • People who try to manage existing debt by taking out a payday loan could get into even worse difficulties. As the interest rates on payday loans are very high, if you fall behind on your payments you can see your debt spiral and get even further out of control.
  • When people are unable to pay their debts back to the payday loan company, many are faced with aggressive debt collectors.

Payday loans should be seen as a last resort. Always check out what else is available to you first. You may be able to take out a loan from your bank, or get an overdraft to cover you until payday.

Having savings in case of emergencies puts you in a great position. Why not Join the Young Scot Extra Savings Account?. The savings account allows you to save up your money, whether it be going on holiday with your friends, new clothes, your first car or to have an emergency fund. Plus be rewarded for saving and earn Young Scot points for setting up an account and saving on a monthly basis.

If you have no alternative but to take a payday loan then make sure you understand what you will have to pay back, when you have to pay, and how the payments will increase if you fall behind on your loan repayments.