Square Money is the best choice – let us explain why
If you think a loan might be the answer, first you must consider the overall cost. It is very important you fully understand how much the loan is going to cost you and that you are able to meet those repayments. Here is the best way to quickly analyse if a loan is the right one for you: Estimate your disposable income and subtract the total amount of the loan including interest. Do you have money left? Then a loan might be the best answer.
Square Money is proud of the excellent service we provide our customers. We are vastly experienced at what we do and strive everyday to get you the best deal.
The best way to do this is to be open about exactly how short-term loans work so you have all the facts to decide if they are the best fit for your needs.
The amount you can borrow is between £80 and £750. Please take your time to consider any loan application. You must be sure that you are going to be able to repay the loan when the agreement comes to an end.
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You pay back: £352.80
Total loan cost: £72.80*
Every firm working within the finance industry is required by law to represent interest rates using Annual Percentage Rate. You may recognise this as APR. This calculated figure compares loans to make decisions easier for consumers. However the figure is not designed for short-term loans but instead agreements taken over much longer periods. It also does not take into account non-interest related fees and charges. This makes it very difficult to use the figure to compare short-term loans.
So, on paper the payday loan has a very much higher APR figure attached to it. This is because a personal unsecured loan is repaid over a total of 5 years – quite significantly longer. If we analyse the total fees on a personal loan there would be an additional £4,981.92 to pay on top of the £15,000 loan. This is 33.2% of the original loan.
If we now match up the payday loan with the 24% charged during a 30-day period against the loan taken over a longer time, the total cost per £1 borrowed is actually LOWER with the short-term loan.
Comparing Payday Loans and Personal Unsecured Loans
Example of a payday loan:
You borrow £200 over a 30-day timescale
You pay back a total of £248
The interest you would pay is £48
The APR is 1269.7%
For every £1.00 borrowed, £1.24 would be paid back
Example of a payday loan:
You borrow £15,000 over a 60-month timescale
You pay back £19,981.92
The interest you would pay is £4,981.92
The APR is 15.9%
For every £1.00 borrowed, £1.33 would be paid back