You might think that the title of this article is a strange one for a blogsite that is concerned with the payday loans experience in the UK. However, since there are a lot of debates going on pretty much without end in sight about these loans in the UK, we thought that we would give our opinion on the matter. Put shortly, we believe that payday loans are a good thing and that they are a necessary financial service in any country. However, we would like to elaborate on this for a while.
First of all, we understand why some people believe that payday loans are not the soundest of the financial practices. The interest rates are astronomical and there is no doubt about this. This is an even bigger issue if you are not careful about where you are getting your loans from and whom you are doing business with. However, it is also important to realize why the interest rates on these loans are that high. The reasons are the extremely high (up to 20%) default rates and the average amount of time before they are repaid, which leaves no room for more sensible rates.
Also, we would like to point out that the interest rates are not such a big issue if you approach your payday loans carefully and if you use them for the right purposes. These right purposes include situations that are out of the ordinary and that are one-off situations that call for a quick monetary injection that can only be applied quickly enough if you go for payday loans.
In essence, if you are careful enough and if you take care of when you use the payday loans and what you use them for, they can be quite a positive experience. The fact is that they are the only loans that you can get legally and that can be obtained quickly enough for certain needs. When you add to that the fact that you can take out payday loans regardless of your credit rating and history, it becomes obvious why they are a basic financial service that we should welcome in the UK.