A payday loan is only designed for up to 30 days
Because they are designed as short term lending, they are generally quite easy and fast to get, do not require credit checks or a clean financial history, but are generally very expensive.
They start to become extremely expensive when rolled over from one month to another, fees and interest compounding very quickly to very rapidly increase the debt.
There are though other cheaper long-term options available
If you are finding that your payday debt is spiralling; or are just looking for a longer term option, we believe that we can help below:
Option 1: Friends or family – the cheapest option
Many people immediately dismiss borrowing from friends or family because it can potentially can be embarrassing for some people to ask.
This can often be a good option which is worth exploring; primarily because it’s much cheaper than many of the alternatives!
If you have any concerns about approaching your family and friends for a loan, the Money Advice Service has compiled a very useful guide to the pros and cons of this type way of borrowing money. Check out the article below to see what they had to say:
Should you borrow from family or friends?
Option 2: Third Part Guarantees – a great alternative
If your friends or family do not have the money, but trust you to make all of the required repayments; then exploring options where someone guarantees your repayments might be an option worth looking at?
Typically available from sums ranging from £500 to £10,000 for up to 5 years; they can offer the ideal debt consolidation tool.
Because the third party ‘guarantor’ guarantees to make repayments should the borrower fail, the recent financial history of the borrower is rendered almost irrelevant and because of this, this type of finance is now widely available.
For more on this type of borrowing, check out the Independant article:
Is a guarantor loan right for you?
What is your credit rating?
To check the current level of your rating to see which options are available, we strongly recommend heading over to the Checkmyfile website to view the UK’s only multi-agency report.
Once there you will have the option to sign up for a one off FREE 30 day report. To view your one off 30 day FREE report, please click here. Alternatively, if your FREE period has expired, you can order a comprehensive report for a one-off payment of £19.99 by clicking here.