Do you shop for an instant cash loan in your lunchbreak?

Wonga, the instant cash loan lender, recently revealed that it receives a large proportion of its applications for short term loans at lunchtime.

So far this year, the London online loans provider, received 200,000 applications between the hours of noon and 2pm from people with full-time jobs. The amount of applications regularly peaks at about 1.15pm, shortly after a lot of people have started their lunch break.

However, consumer organisation Which? has warned people to exercise caution when applying for a payday advance. Richard Lloyd, the executive director at Which?, explained that instant cash loans can appear to be the ideal solution for people who cannot make their salary last until their next payday, but they should only be used as a last resort, as they can work out to be an expensive way of raising funds.

Although consumers with a good credit record will probably find an authorised bank overdraft works out to be a better option, those with a less than perfect credit record may not find that luxury is available to them.

Which? compared the cost of borrowing £100 over a period of one month using overdrafts and short term loans. As expected, an authorised overdraft cost less than £10 at all the major banks, except the Halifax and Bank of Scotland.

An unauthorised overdraft with the Co-operative Bank, First Direct, Nationwide or HSBC will cost between £21.24 and £26.50, whilst a £100 instant cash loan from a company such as will cost £25.00.

The cost of short term loans does vary and consumers should make sure they shop around for the best deal before starting their lunchtime application.

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