How payday loans work
How payday loans work
Payday loans are short-term loans originally designed to tide people over until payday.
The money is paid directly into your bank account, and you repay in full with interest and charges – at the end of the month.
Increasingly though, you can borrow for longer periods – typically three months (but longer loans are available) and repay in instalments.
What all these loans have in common is that they are high cost and short-term, and often for small amounts.
Normally you have until payday to pay back your loan plus interest, although some payday lenders let you choose the repayment period.
A payday loan is expensive and could make your situation worse if you can’t afford to pay it back on time. You need to think carefully before choosing one.
Source: https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know
