Payday loans are becoming popular in the UK due to its numerous advantages over the conventional loan. One of the reasons of it popularity is the hassle free formalities involved in the sanction of payday loans. Legal formality involves no teletrack payday loans direct lenders lend money on the basis of employment status. This also makes it possible to receive instant loan, sometimes on the same day of application. This makes it a recommended loan scheme to apply for when you are in need of immediate financial assistance.

But there are people who are still skeptical about the payday loan and they contribute to the bad press. One of controversial opinion is that payday loans charge more interest in comparison to the traditional loan schemes. This is supported by the fact that it charges higher interest in comparison to the annual percentage Rate. But the annual percentage range was devised for loan schemes for long term loan schemes and not for short term like payday loan.

Compared to other short term loan schemes like doorstep loan, the interest rate for payday loan is found to be competitive. In doorstep loan, the loan must be repaid within the same month, else, extra interest will be charged for delay. In payday loan the maximum amount of money can you can borrow is £ 750 and this must be repaid when you receive your pay check. Also, payday loan keeps a check on the amount of money borrowed and helps you avoid overspending as, you will have to repay for the loan from your pay check.

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