There are a number of controversies that surround payday loans, not only in the UK, but n other countries as well, especially in the USA, where there are states in which you cannot legally take out a payday loan. It would take too much time and space to cover all of these controversies, but the one that definitely captures everyone’s imagination s the controversy that surrounds the usage of payday loans in the UK and other countries and that often talks about poor people who are getting even poorer by taking out payday loans without actually having enough money to cover for the interest rates that pile up on each other as time goes by.
However, it is important to point out that it is actually the middle class that most commonly takes out these loans in the UK, which is sort of expected as you do need a proof of steady employment or some other form of income in order to take out payday loans. It is still necessary to know exactly how payday loans should be used and for what they should be used in order to avoid the pitfalls that might be associated with these loans.
For instance, you should never use payday loans to cover for your regular expenses, such as bills and other outgoing costs that you have regularly. If you decide to do this, you will most probably soon find out that the interest rates have accumulated too much, which becomes an even bigger issue when you factor in the fees and rollovers that can also accumulate.
Instead, payday loans should be used in situations in which you need a quick financial injection in order to cover for an expense that you encountered without expecting it. For example, there are always certain repairs that are needed around the house or around the vehicle that can often be very urgent and that can at times surpass the money you have left over after you have covered all your other monthly expenses. Some people may also use payday loans to pay for gifts that they forgot about or in order to take advantage of a bargain of some kind.
Whatever your intended use for payday loans might be, make sure that it is a one-off case and that you have the money you will need to pay back the loan.