Governor of the Bank of England Sir Mervyn King has claimed that short term loans could be the answer for Britain's banks. With the current Euro crisis in mind, King said that lower-cost sources may be able to help prevent further losses for the banks. King claimed that some banks thought nothing could go wrong before the crisis but, when it did, they relied on taxpayers' money to survive.
If short term loans are potentially the saviour for Britain's banks, should the same logic be applied to individuals who face their own financial crisis? In short, there are both advantages and disadvantages to taking up what are commonly known as "payday loans".
Applying for a payday loan is a simple and stress-free process that can be completed in less than a minute with payment usually received in less than 24 hours with some lenders even able to pay within an hour of an application.
The downfall to this short term loan is that repayment is usually required within a month of the transaction and the rate of interest can prove fairly steep in comparison to a regular loan from your bank or building society.
However, there are of course some healthier alternatives that won't put more dents into your bank balance! If you have some items of value that you no longer make any use of it could be worth selling them on to friends or family. On the other hand, you could use an online auctioning web site to sell off your goods.
Secondly, you must consider the rate of interest that you will be paying on your loan - search around to discover the lenders that can offer competitive rates. Payday loans, used in the correct circumstances, are certainly a useful commodity and will relieve those unexpected money pressures that can appear when we least need them.
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