Payday Loans Better than Credit Cards

Do you think payday loans are better than credit cards? Once a nation filled with the highest credit card spend, the US is now moving on to the payday loan culture. Here are the advantages of taking a payday loan over a credit card:

1. You get cash instantly within 24 hours of submitting the application
2. Your credit rating is not affected by payday loans
3. People who have bad credit who had very less or no option for loan in the past, have payday loans to their rescue.
4. Though payday loans have a high interest rate, so do credit cards. Credit cards have a very high interest rate when you use it to take out cash from the ATM. But then payday loans do not behave like credit companies which charge increasing number of late payment fees, over the limit fees etc.
5. Since you are taking money of relatively smaller amounts, it is easier to pay off payday loans too.


Also read how payday loans are beneficial in times of recession.

Online Payday Loan Quotes

Online payday loan quotes are of great benefit to several American workers who experience short term cash deficit and would like to tide over their financial problems. There are millions of Americans on a fixed budget living from paycheck to paycheck and there are times, when they have a dire need for cash, the best way to bridge this gap is through short-term cash flow measures in the form of payday loan. Now why should we go for online payday loan quotes? Well, you may go from lender to lender, but how do you know which is the best deal for you. Fortunately, online payday loan quotes may you arrive at a smart decision.

When you go for online payday loan quotes, you are able to compare different quotes from various payday loan lenders. Just one website is enough for you to find out the best deal. Also most payday lenders offer competitive rates to gain an advantage over their rivals. So the consumer clearly stands to benefit from a good deal. Also a payday loan company has its own interest in making you their customer. They want you to be their permanent customer and take loans from them, so they will offer better service and better delivery too. There are ‘fast payday loans’ or ‘fast cash payday loans’ that promise to give you cash within just 24 hours of filling the application. Read about payday loan eligibility factors

Payday Loan Eligibility Factors

To apply for a payday loan, an applicant should be
1. Above 18 years of age
2. Prove that he or she has full time employment with their salary going into their bank account
3. Able to give post-dated checks as an option
4. Residence of the country (Please note that cross lending in payday loans will start from June 2010)

Usually, the first payday loan that you receive is $100 to$400. Once the person establishes a relationship with a reputable payday loan company, he or she can get loan extensions that can be up to $1000 pounds.

Payday Loans Benefits Lenders too

Payday loans advertisements have become very dominant in the UK and USA. Take for instance, London, you have shops competing for selling payday loans on opposite sides of the road. The fact that these loans are offered for relatively small amount on the basis of credit so that you could bridge your finances over the next salary has been found attractive to many.

Please do not think that the reason for payday loans to boom is because consumers need cash, there is another side to the story as well. Even lenders are feeling short of funds, which is why they find it easy to lend money in small amounts. So the real success story of payday loans is due to the fact that it has benefitted both the lenders and the buyers.

Since wholesale funding has evaporated, specialist lenders are now concentrating on offering short-term loans instead of large loans. Thus the number of lenders who offer payday loans for less than £1,000 or $1000 has risen. For the lenders, the small loan size and the promise of quick returns promises to be a good attraction. Payday loans online came into existence at the start of 2005, where regulations deemed it proper to be offered on the Internet.

What is the APR(Annual Percentage Rate) of Payday Loans? Well, this metric that is used to compare different lending offers and credit rates is of prime importance when choosing a payday loan. By law, the lender should disclose the APR of the payday loan before the agreement is signed. Bear in mind that the APR does not include late or missed payments.


There is a major payday loan company that is charging £9.99 for a £90.01 loan that is repaid within 30 days. The APR on this deal is about 260.2%. So do not just go by attractive TV advertisements, under the payday loan APR also. Compare to this a credit union loan of British credit union, where a typical loan of £200 for a month from Manchester Credit Union will cost £4, at an APR of 26.8%. But credit unions do not have the penetration in the UK as it does in the US, Ireland and Canada.

Come June 2010, there will be cross lending in payday loans according to new European legislations. Payday loans seem to stay in these times of credit squeeze. Read about payday loan eligibility factors