Money Lending Websites: Too Good to be True?

The latest phenomena to occur from the current debt crisis is that of the ‘money lending website’; a group of different websites which promise to give you a substantial loan often regardless of your credit history. Although these websites may seem like a sure-fire way to get out of your impending money problems, they are filled with flaws and problems.

What do these websites do?

The money lending websites will loan you money often regardless of your financial background. By simply entering your basic details and how much money you want to borrow and the repayment timeframe, you can find yourself with a substantial amount of money in your bank. The websites are particularly aimed at people who have fallen behind in payments, or want some extra money to purchase some goods. Whilst on the surface these websites may seem like an excellent idea to help solve short-term financial problems, in reality they can be hugely detrimental and expensive if you fail to read the terms and conditions correctly.

The problems with these websites

These websites make their money through the interest that has built up on repayments. If an individual borrows £100, it is unlikely that they will pay this amount back - they will pay much more. The Annual Percentage Rate (APR) on these ‘quick loans’ can be enormous and if for some reason you fail to make your repayments, you will end up owing a lot more money. It is really important that you are fully aware of these terms and conditions and you should be sure that you are able to pay back the loans on time before you make a commitment to borrowing money.

Although these websites may seem like an ideal way out of your financial problems, they’re often too good to be true. It is important not to forget that these websites have the aim of making money and helping you out is second in their priorities. Money lending websites are good if you can pay back the money, but in general you will end up paying back a lot more then you borrowed.

Picture: Anatoly Vartanov