Payday Loan explained...

For many of us, payday loans are incomparable to the alternatives available on the market for a short-term solution to a lack of cash flow. With these lenders considering all applications regardless of a credit rating, the reduced risk because your loans aren’t secured against assets, and the flexibility regarding repayments, the advantages of this short-term credit are abundant.

Some of the alternatives involve trading spare gold you have for cash. However, research by a number of national newspapers showed that in actuality, the value you receive for the jewellery you trade is appallingly bad. Not only this, but the cash you would gain doesn’t replace the sentiment that some of the trinkets you would trade have.

Which? are a consumer guidance organisation that offers advice on how to get the best deal, and what to do if you need some support with your finances. The chief executive had this to say: “The poor value for money that these TV gold buyers are providing is simply shocking. The cash for gold market is unregulated, and this investigation has raised some serious concerns about the fair treatment of consumers.”

Not only is there bad value for money, but the inconsistency amongst different ‘cash for gold’ businesses. Whereas one company might only give you £40 for jewellery worth over £700, another might offer substantially more, meaning that you can never be sure that you are getting the best offer.

With a payday loan however, there is more transparency with what you are lending. You know exactly the amount of money which would be repaid at the end of the month, and what the terms of the agreement are. Also, you can pay back the money when you get your salary back – meaning no more foregoing the items you love to get the cash flow you need.

There are other ways that you can trade in items such as games and DVDs. Even though this might seem a good idea, the money that can be generated from such sales is low, and you will most probably lose out on the opportunity to buy them back on the same rate. If you need short-term credit, it is worth considering the most viable options based on your circumstances that will bring the best value for money and ultimately the best deal.

Because of how the industry is regulated and many people proceed to make the payments in a responsible and timely way, it’s an easy generality to make that for the most of us, payday loans are the best way to get short-term cash – repayable in a way that suits us the most. Because of how selling the items we love offer such a poor deal, considering this option too extensively is a bad idea that will also endanger the possessions that we’ve cherished throughout our lives. Getting finance doesn’t have to disadvantage you.