The internet, in itself, is a great source of information. However, these information are not always factual. For example, payday loans, despite being one of the most beneficial lending methods in UK, are getting so much bad press simply because many lobbyists are skeptical of its advantages. As a result, misinformed individuals spread inaccurate information about cash advance payday loans. To set the record straight, we give you several payday loan debunked myths about this lending method.

Payday lenders prey on indebted customers

It is important to note that any business will gain profits from their customers. Payday loans are not an exception to this. However, while there are many people who think that such business is preying on financially challenged customers, it is all too easy to forget that this industry will not grow if there is no demand for it. Cash advance loan lenders are there because there is a genuine need in the community for extra cash. The notion that payday loans are there only to prey on indebted individual is a definite inaccurate picture of the industry itself.

Paying overdraft fees is cheaper than taking out payday loans

This is downright inaccurate simply because overdraft and late fees applied to most credit cards and bank accounts are much more expensive than an average cash advance payday loan. On the other hand, most lenders will offer a one-time flat rate before the contract is signed. The process to get a loan is very straightforward as well so there is little confusion in terms of the real cost of the loan. If you are dealing with a legitimate payday company, every single fee will be disclosed on the contract.

Payday lobbyists have borrowers’ best interest in mind

Lobbyists against payday loans want to abolish this type of financial aid through misinformation for a wide variety of reasons. Whatever reasons they may be, there is no way that anti-payday organizations can speak in behalf of all customers who continue to take advantage of cash advance payday loans the way they are meant to be used; with outmost responsibility not only to consumers but also for lenders as well.

Payday lenders harass delinquent borrowers to forcefully collect unpaid loans

At TopPayday.com.uk, we collect unpaid debts in a way that makes repayment easier for our customers. We make sure to educate each borrower to ensure that they understand fully what process will take place once they apply for a loan. We only lend to people who are known to take payday loans and use the money responsibly. If account collection is needed, you can be sure that TopPayday.co.uk will handle the process in a fair, professional manner that does not require criminal actions at all.

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Payday loans are useful in bridging the gap between paydays. However, no other type of financing has ever gotten such bad reputation as cash advance payday loan. The reasons for this are largely because lobbyists are trying to malign an otherwise useful financial aid, littering the internet with misinformation. To set the record straight, we have compiled and expounded on various cash advance payday loan “disadvantages”.

Cash advance payday loan is no better than loan sharks because of the high interest charges

You are likely to see articles, which claim that cash advance payday loans, will charge up to 300% on APR online. However, this figure is largely exaggerated and often written out of context. The APR or annual percentage rate is the interest charged on a loan for a full year. How can payday loans lenders ask for 300% in APR when this loan is payable in just weeks, not a full year? Note that on an average, cash advance payday loans will ask a flat rate per loan amount. The flat rate will vary from lender to lender. The only way for a loan to reach as much as 300% in APR is if it is rolled over for over 26 times or over a course of one year.

Cash advance payday loans trap customers in a debt cycle

This is highly inaccurate because for one thing, the laws and regulations for lending will vary from one place to another. Some places do not allow people to roll over their debts. In addition, many lenders avoid lending more money to customers with existing debt. It would depend on the borrower if he or she wants to be sucked into a cycle of debt. However, as long as you pay your financial obligations on time and manage your finances well, you will not be trapped into any debt cycle.

Cash advance payday loans take advantage of low-income families

How many times have you heard that low-income families only use payday loans? The fact is, this statement misinterprets the real payday customers. Payday loan customers are employed individuals who make a decent living. The only problem is, just like anyone, these people have encountered financial difficulties and in need of money right away. Most lenders do not allow unemployed borrowers to take out this type of loans at all.

Cash advance payday lenders charges high interest to profit from customers

In terms of profitability, payday loan lenders make relatively low than other types of lending services. On an average, the profit margin for cash advance payday is only 3.57% while traditional commercial lenders make as much as 13.04% in profits. This means lenders do not make as much as most people thinks.

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