Payday loans in UK under fire – yet Brits still seek them out

Despite the fact that short term loans in the UK have been under heavy fire from critics and detractors, Brits have been seeking these no credit check loans in drovers as the economy continues to demonstrate its instability.

No credit check short term loans are a recent import from across the pond, where lenders have been offering similar services in the US for many years.  However, with the economic situation worsening over the past few years, lenders have begun to offer their services in the UK, which usually means providing much-needed funds in the form of short term loans of usually about 30 days.

Most borrowers, who are typically middle income earners who have to deal with a sudden, unforeseen expenditure, take out anywhere from as little as £100 to as much as £1,000 until their next payday before repaying the loan.  For Brits with the need for immediate cash and who can’t afford or rely on a traditional High Street lender for the needed funds, short term loans have become a solid source of emergency funding for many.

There are several caveats with short term loans, of course, though many news media outlets may have succumbed to alarmist reporting in regards to these dangers.  Much like any loan, missing a repayment will result in some rather stiff penalties, but because of the extremely short-term nature of these loans, these fees can be high due to the high APR associated with an instant cash loan.

The truth is you can’t compare the APR you would get on a traditional three-year loan from your bank, which requires credit checks, and a short-term instant cash loan of only 30 days – especially since payday lenders do not require credit checks.  In order to counteract the increased risk on their part, these lenders simply need to charge a bit more – and in comparison to the use of an unauthorised overdraft, the fees are relatively identical provided the loan is repaid in full once it is due.

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