Katherines Foundation

Because a consolidation loan usually requires a large loan amount i.e. more than the payday lenders are happy to lend this excludes paydayloans from being used. As the name implies a payday loan is a loan that is taken out and repaid on your next payday. By virtue of this fact they are for relatively small amounts from £50 up to £1,000, although most lenders will restrict this amount to £400 the first time that you apply with them. They are however quite useful for other purposes because of the fact that they can be paid out on the same day that you make your application. This makes them a sensible choice when it comes to dealing with any short-term financial problems that you may encounter from time to time. Whereas a consolidation loan is a loan that is taken out to consolidate all your existing expensive unsecured loans and or store cards and credit cards. Because of this they tend to be for loan amounts that are much higher than the payday lenders are happy to lend. There are other types of loan that are better suited to being used for the purpose of debt consolidation.