www.CashYes.com

No, they're not illegal! In fact, payday loans are a very useful type of short term loan; therefore if you haven't got knowledge on them, I'll aim to enlighten you in this quick snappy article on payday loans.

A Payday Loans Overview

A payday loan is a short term loan, a short term borrowing solution. By short term I mean less than 31 days. The concept behind the loan is as the name suggests. When you're running short of cash in any given month, you can receive a cash advance from any one of the loans companies out there.

The average APR of a payday loan is 360%. This is a little bit deceptive as that is the annual interest you would pay if you held the loan for an entire year, but as the loan is only typically held for less than 31 days, the actual average interest the customer pays is about 20% to 30%. If you look at it that way, you're pretty much paying back about 1% per day. Let's take an example. If you borrowed £200, you would pay back about £40 to £60 in interest along with the initial loan amount. Therefore you'll pay back about £240 to £260 in your next pay packet. It really isn't that bad when you look at it in that way, especially if you're in a tight situation and can't turn to anybody. Some people think that amount is extortionate, but I think it's reasonable. These loans are taking a high risk lending to you, especially as most loans will get passed in 15 minutes, therefore it only makes sense that they need to charge a higher percentage as to cover the people who don't pay back.