Not all short term loans carry high interest rates any more

While short term loans in the UK have been criticised for their high interest rates, one provider has done away with that by offering zero per cent instant cash loans.

The payday advance provider has launched a new service for borrowers who earn a minimum of £750 on a monthly basis: from this month to March of 2012, these select customers can make an eight day loan of as little as £50 and or as much as £300 with 0 per cent interest.  However, borrowers who default on the loan face charges of 50p a day on every £100 of the loan, back-dated to the day the loan was originally taken out until repayment is done – equivalent to an APR of 448.3 per cent APR.

Industry experts say that instant cash loans can be quite useful to get the money you need as quickly as possible.  However, these experts also say that borrowers need to have full understanding of the terms and conditions of such a loan if considering one.

With the state of the current economy, a large proportion of middle income earners have found it a struggle to make ends meet.  This has resulted with short term loans in the UK becoming increasingly popular, as few providers require credit checks and the cash can be deposited directly into your bank account in as little as a few hours.

Most of these loans can quite expensive in comparison to a traditional longer-term loan, with some APRs exceeding 4,000 per cent, which makes the new deal’s highly reduced interest quite attractive.  However, critics state that unless Brits tackle the underlying dilemma – of incomes not being sufficient to cover outgoings – next month will most likely roll around with the same problems, plus the added expense of paying the interest on whatever loan you might have taken out the month before.

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