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The payday loans industry has been in the news lately as more people than ever before are using short-term low value loans as a viable solution to temporary hardship. The loans are intended to give the borrower access to fast cash (txtloan.co.uk/fast-loan/) that can be used until their next paycheque comes in, and they can be very useful indeed. The fact is that we all need financial help at some point or other, and the worst time of the month is when the bills need paying yet payday is still a week or more away.

The beauty of the instant loan (txtloan.co.uk/instant-loans/) is that access to the money is there and then, and the application process is very simple. There are many other benefits to these clever short-term loan solutions, and they are available across the board in many different amounts. Like all financial products, adverse publicity is not difficult to come by, but the critics of the payday loans system overlook the need for such stop-gap answers. Sometimes, to borrow a small amount of money for a very short time can help stall penalties on late payments of bills.

Consider the possibility of utilities being cut off, and the subsequent cost of having them reconnected. These costs can be off-set by taking out a payday loan and repaying it, in full, on the agreed date; this will cost very little – in relative terms – compared to the costs of reconnecting your utilities when you get paid. Naturally, payday loans companies charge higher interest rates than conventional lenders, but this is because of the short amount of time, and the amount of money, that is being lent.

Indeed, recent research has shown that it may be cheaper to borrow a small amount from a payday loan company than from a high street bank. Assuming the repayment is made on time and in full, the savings can be quite considerable. This, and the fact that payday loans are easy to apply for and do not require lengthy forms to be filled in, is why the short term loans are becoming more popular.

In many cases all the borrower needs to provide is proof of income and a bank account – as well as a valid address – and the loan is likely to be approved. Many lenders have a restriction on the amount that can be borrowed in the first instance – this is a safeguard both to them and the borrower – and if the loan is successfully repaid any further borrowing can be for a higher amount. Such careful consideration is typical of the payday loans industry and makes for a safer environment for the borrower.

All consumer finance schemes will have critics. Where payday loans are concerned, they should be considered for those emergencies when conventional lending may be too difficult or not easily accessible. The trick is to make sure you borrow only what you need, when you need it.

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