For many, applying for a payday loan is an easy way to patch up a short-term financial shortfall. Their convenience and accessibility makes them an ideal choice, particularly anybody who may have poor credit. However, one of the major drawbacks of this kind of borrowing is the relative cost of doing so.

For instance, if you were to go to your bank and seek a loan (presuming you’ve got a decent credit rating) you might expect to be offered a rate somewhere between 8% and 16%. However, when it comes to a payday loan, this is likely to be well in excess of 1,500%. Now that doesn’t mean that you will be paying 100 times as much for the same level of borrowing, it simply shows the disparity between APR on long and short-term loans.

Whilst you can expect to pay upwards of 25% on a payday loan in real-terms, this can still add up to a significant figure – particularly if you are borrowing large amounts. As the loan amount is repayable within a month, you will be under significant pressure to come up with the necessary funds in a relatively short period. This is where the issue of getting two payday loans really comes to the fore.

Payday loan companies are generally happy to lend between £400 and £750 to first time applicants. The upper limit is solely at the discretion of the individual lender. In most cases, this level of borrowing is sufficient. After all, it is a short-term loan and is only designed to cover emergency costs.

In rare cases where you do require more and a single provider is unable to assist, then it is possible to successfully apply for a secondary payday loan. However, you should be cautious when doing so. The more you borrow, the more you’ll have to repay. This can put a huge strain on your finances, particularly when you factor in an additional 25% of interest on top.

So whilst a £400 loan would come with an interest charge of £100, making a total repayable debt of £500, an £800 loan (spread over two companies) would double this figure, meaning that you’d need to repay £1,000 when you next receive your salary. Now for most people, that is going to pose some significant issues.

This is why it is so important that anybody seeking a loan is fully aware of the terms of borrowing and the total cost. Failure to properly calculate your current and future status could result in defaulting repayments or an unmanageable cycle of debt. Either way, it’s bad news for your bottom line.

The possibility of obtaining two or even more payday loans arises as a result of the lack of stringent credit checks from some companies. Some will carry out a more comprehensive investigation into your financial status, but others are happy to simply use the details you’ve provided (notably your monthly salary) as a guarantee of your ability to repay. However, just to reaffirm, this loophole may be open to you, but in most circumstances it isn’t advised.

Essentially you should be looking to use a payday loan to solve a problem that poses an immediate threat to your financial status or quality of life. So if you are on the verge of defaulting on a mortgage payment or missing your rent, a couple of hundred pounds might keep you from getting into unnecessary trouble. By borrowing responsibly, you will also be able budget for any repayments and ensure that you have the money available when the time comes.

To get two payday loans you must apply through separate companies and be aware of their lending policies to ensure that you aren’t contravening specific rules. Those who don’t perform credit checks are certainly more likely to accept applications from those who have outstanding loans though. But make sure you apply due caution and don’t use payday loans as way of delaying financial difficulties.

Vincent Rogers is a finance writer who writes for a number of finance businesses. For reliable payday loans, he recommends Paydaypower.co.uk

Vincent Rogers is a finance writer who writes for a number of finance businesses. For reliable payday loans, he recommends http://Paydaypower.co.uk

Author Bio: Vincent Rogers is a finance writer who writes for a number of finance businesses. For reliable payday loans, he recommends Paydaypower.co.uk

Category: Finances
Keywords: payday loans, same day loans, loans, UK, finacne