Need cash in a hurry? Be careful what you borrow.
If you're desperately short of cash loans may seem like the perfect answer, but there are plenty of traps for the unwary. Many firms will give you an advance on your wages, but you'll pay unbelievably high interest rates – even if you repay the cash quickly.
We've all been there: it's ages until the next payday and there's no money in the bank. When you're desperately short of cash loans offer a temporary solution, but if you're not careful you'll pay an absolute fortune in interest.
Sites such as Month End Money (www.monthendmoney.co.uk) offer quick cash loans, and in most cases the money will be in your bank account the following day. However, if you read the small print you'll discover that the typical APR for a 30-day loan is 1,355%. That's not a misprint. It really is one thousand, three hundred and fifty-five percent. In practice that means if you borrow £80 you'll repay £100; if you borrow £500, you'll repay £625. And that's if you repay within a month: if you don't, the interest starts accumulating at an alarming rate.
If you're short of cash loans aren't usually the best solution – especially if the problem is that you're living beyond your means. By all means borrow money to deal with one-off disasters – the car exploding, an unexpectedly high telephone bill, urgent repairs to your home – but if you're already having problems with your money, borrowing even more money will just make the problem worse.
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