25% Interest Still Seems High!

The majority of Payday Loan companies do not perform any type of credit checks and therefore must be able to absorb a high level of non payments from customers. The customers that use payday loans usually have a bad credit history and these payday loan companies offer them small loans for times that customers may require them, however due to the increased risk that these companies take it is necessary for them to charge this higher rate.

Not Secured

One of the main advantages that payday loans offer over more conventional loans that may be available to those with bad credit is that they require no form of security (a house or a car), and therefore in my mind are a safer loan than many. I would never condone those with a bad credit history risking goods that they have worked hard to obtain on a long term loan as it is never possible to see what may come in the future. If you are taking a two year secured loan and you lose your job (almost likely in these credit crunch times) you will soon find that it is not only your job you have lost but also your car or worse still your house. With Payday Loans, as they last for only a month, you can be more confident of your ability to repay them.

In my mind Payday Loans have many advantages over other bad credit loans and should not be disregarded due to bad press coverage, or poor reviews in the media. There are now many payday loan companies that provide excellent service and are run by long standing financial institutions.