A Payday loan is nothing but a loan designed especially to be given for a very shorter period, unlike the traditional bank lending. Typically, the payday loans are promoted and advertised when people are confronted with unexpected debts, purchases or needs. These loans act like funds around the end of your month when you run out of the money and are strapped for any cash.
They are only arranged for days and not years and therefore, can only be used as stopgaps until your wages come and once you get the payment, you need to pay them back before the deadline. Answering to the question how much you can borrow, you can always lend upto £1,000. However, it also depends on the lender as they will have some restrictions when you’re borrowing for the first time like the trust issues.
Loan periods usually start from weeks and can run upto few months. For example, the Chicago Tribune offers payday loans from days to months and they usually do not charge any kind of early charges for repayment and they will give you an optimized interest and affordable time period, before which you should pay off the loan. You might have heard that payday loans are very expensive, but are they really? No! They are the same as the bank loans but only with a shorter period. Sometimes, the interest rate is even lesser than the bank charges for the unauthorised drafts and you might find yourself at a better position if you have already preplanned how to spend the money you’ve lent and how to pay it back within the scheduled time.
Sure, an authorised draft or an interest free card are better alternatives, but they might drown you deep even before you know it. Therefore, if you don’t delay the repayment or extend it without informing the lender, a small payday loan will eventually become a burden to you or else, nothing as comfortable as a payday loan.