Updates from October, 2009

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  Alternatives to Payday Loans

  admin 10:38 am on October 26, 2009 | 0 Permalink | Reply
  Tags: logbook loans, Same Day Loans (3)

  A few years ago, in the UK, it would be safe to say that almost nobody knew what a payday loan was. However these days it is the first thing most people type into Google when they need a fast cash loan online.

  Payday loans or cash advances were first introduced in the USA before being taken up in the UK.
  Now with the credit crunch, more and more people are finding it difficult keeping on top of their finances and are seeking fast cash loans such as payday loans, but are they the only option available?

  Logbook Loans Paid in Less Than 1 Hour

  In addition to payday loans which are secured against your wages, logbook loans may be good alternative. They generally offer a far lower APR usually around 350% compared to payday loans at around 2000%.

  A logbook loan is secured against the value of a car, van, motorbike or other vehicle of value. Logbook loans are very competitive compared to payday loans as they can be paid out in as little as 15 minutes, although you will have to drive to your nearest branch to pick up your cash loan. Another advantage is that the loan can be repaid over a number of months, which makes the repayments more flexible and manageable. Bad credit is not a problem either as the vehicle logbook is used as security for the loan simply drive to your local branch, pick up the cash and drive off with your cash loan up to half the value of your vehicle.

  Check out Logbook Uk which gives a national directory of logbook lenders in the UK.

  http://www.logbookuk.co.uk/

   

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  Understanding APR and The Actual Cost of Your Loan

  admin 9:27 am on October 1, 2009 | 0 Permalink | Reply
  Tags: annual percentage rate, apr (2), loan (2)

  First I should explain what APR or Annual Percentage Rate means.

  APR is calculated as the amount of interest you will have to pay on your loan if your loan in one year. This is very useful for such things as mortgages as it allows you to compare different mortgages and choose the right one for you. It is generally better to choose a product with a lower APR – that is when all other factors are equal.

  For example, if you have loan A for 5 years at 10% APR and loan B for 5 years at 8% then loan B should be the better choice. The lower the APR the better is the general rule.

  Things get confusing however, when we want to compare APR for short term loan products as payday loans are meant to be a short term solution to be repaid on the next payday. Payday APR’s vary between 1000% APR and and around 3000% APR and yes these numbers ‘look’ scary but when we remember that APR is calculated on the amount of interest over a year it makes sense as payday loans are generally taken out for between 7 days and 3 weeks in most cases.

  Other short term products would look equally scary if we applied their rates over a year.

  DVD Rentals : £3 a day or £1068 for a year

  Taxi to the airport : £60 or £512,640 for a year

  1 week holiday : £1000 or £52,000 for a year

  Calculating an annual cost just doesn’t make sense with short term products such as taxi’s, holidays or payday loans, but as payday loans are a financial product, legally lenders have to display their APR on their products clearly.

  Payday Power likes to keep things as simple as possible and that is why we also display our actual charges which are fixed at £25 for every £100 borrowed. So if you borrow £200 you will need to repay £250. Your actual APR although very high does not change the amount you will need to repay. The cost of your short term loan is based on the amount you borrow and that’s it.

  View our loan chart to see exactly what our loan costs are.

  Still think APR is important when getting a payday loan?

  Still think APR is important when getting a payday loan?

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