Sunday, July 25, 2010

Is It Better to Go Through a Same Day Loan Broker for Cheaper APR?

As with many other industries, using a broker to secure a payday loan can help consumers to get a better deal. Whilst it won't necessarily guarantee the very best APR available on the market, brokers should be able to deliver results from a broader range of lenders. This can have a variety of benefits for applicants, including greatly improved prospects for eventual acceptance.
If you have been looking for payday loans or have used them in the past to get out of a temporary financial fix, then you will probably have noticed that the APRs being advertised are pretty sizeable. You could certainly be forgiven for thinking twice before applying, especially if this is your only basis for comparison. However, this can be slightly misleading.
With any kind of long-term borrowing, including credit cards and personal loans, you can usually use APR as a method of evaluating various offers. It gives you a clear indication of the percentage that you're going to be charges over the course of a year, and therefore highlights where the best value can be found. However, when it comes to short-term alternatives like payday loans, this figure can be hugely misleading.
Because the loan is only for a finite period and isn't designed to run beyond a month, let alone an entire year, the percentages on show often run into four digits. However, this shouldn't be a cause for consternation. The likelihood is that you will not be asked to pay above 30%, often even less, for the amount borrowed. Whilst this still isn't cheap, it's a significant improvement on 1,500%.
Therefore, you would be well advised to compare the actual cost of borrowing, rather than simply APR. Most brokers should make this relatively simple to do though, with many offering the average cost per £100 borrowed for the lenders they represent. This should give you a much clearer indication and a better basis for comparison.
The role of a broker is effectively to help facilitate the process of finding a lender. Therefore, in order for them to deliver results to customers and succeed within a highly competitive marketplace, it's important that they offer the widest selection of lenders, who offer the best value. This can only be a good thing for people who choose to use their services.
Equally, if time is precious to you but you still want to apply for a payday loan through a number of companies, then a broker can ensure that you enjoy a pain-free application process. Rather than approaching each one individually, you can instead fill in a single application and scour the market instantly. As credit checks aren't always employed, this won't have a negative impact on your credit history either, meaning that you can apply with confidence.

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