Wage Advance Loans can be a perfectly useful service for those who have an urgent need for quick cash to see them through until their http://www.ukpayday.co.uk>next payday arrives. Whether this is because of a cashflow problem, or an unexpected expense, payday loans can help span the shortfall.

These loans come at a cost though - and it's a high one. Payday advances are widely regarded as one of the most expensive forms of legal finance out there, with huge rates of 1000% or more commonplace. Why are the costs so inflated?

The first matter to highlight is that cash advances are borrowed over a short period of time, while the classic APR measure of interest charges is intended for evaluating how much interest would be paid over an entire year. As few pay day loans are taken up for this length of time, APR figures are perhaps not the best way of measuring how expensive they are in normal circumstances.

Nonetheless, the costs are significant. You're paying for convenience and speed, as most loans can be in your bank within 24 hours, and also because of the lack of credit checks you're also in some senses paying for the risks taken by the payday lender who may lend money to people completely unable to pay it back.

You're also paying a higher amount because the lenders know that people who need funds pressingly are happy to spend more than those looking for longer term borrowing and are willing to shop around for a good deal.

It is this last reason that is the fundamental one wage advance loans are so expensive - as an industry, payday finance companies know that they are the last chance of credit for those applying, and so can afford jointly to charge high prices for their undoubtedly popular services.