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We’re going to make a few assumptions in an effort to understand you and your motivations if you don’t mind. We’re going to be generalising somewhat, but do bear with us, we aim to help. So first we’re going to assume that for whatever reason you’re considering a payday loan. Perhaps you’re in some kind of temporary predicament and need a quick burst of cash to get you through it. Perhaps your car needs a new part to continue running, or your house boiler has needs repairing. Whatever the situation is, it requires immediate attention.
You’d wait until your next payday if you could, but the problem is it’s a week or two away and you need the cash much sooner than that. You’ve never had a payday loan before but you’re giving it serious consideration, here’s a few things you should know before you do:
Payday loans are recovering from the bad publicity they garnered during their early years. While some companies may have been considered controversial in the past, modern payday loan companies are subject to the same laws and codes of ethics that any other UK lender is compelled to follow. No UK lender who is regulated by the FCA (the Financial Conduct Authority) is allowed to conduct any shady or unethical practices, if they did and this was discovered by the FCA during an audit, the company in question would be forced to cease trading. They would also be forever labelled with this and it would damage trust in the industry, which at the time of writing is higher than it’s ever been.
While payday loans all now need to operate within the rules of the FCA, and do, that doesn’t mean that some do a better job than others. Be it in terms of customer service, or their rates of interest, all payday loan companies are subject to consumer scrutiny. Those who fall foul of their customer’s high expectations soon pay the price. When deciding on a payday loan company to use always check TrustPilot.com to read who has the best reviews. Every review written is real, verifiable and completely trustworthy. The company themselves has no way to edit, fabricate, add or remove reviews.
In short, you're going to deal directly with lenders in direct lenders. But if you go through brokers, they may even charge fees as they will sell your application to direct lenders. It's then up to the lenders to decide whether or not to accept your application. Because of this, it's recommended that you go through direct lenders at the get go.
If you are looking for the best deal, then consider using a comparison site. There are many payday loan companies in the UK, and while they all will be offering legally safe and ethical products some are bound to be more favourable than others. A comparison site impartially shows which payday loan company has the best deal at that moment in time, and to whom they recommend their services. Remember not all payday loans are alike, some are specialist and designed for different purposes. Some are designed to be paid back within days while others are intended for longer payment plans. Remember there are various types of payday loans to such as doorstep loans, 15 minute loans and a collection of other forms that have their own unique offerings.
Payday loans usually provide an instant decision from lenders and the money can be in your account within minutes. Some take just 15 minutes before they are approved and in your bank account. This means there’s no need to sit down with your personal banker and convince them why you need the loan. Or no need to ring a call centre on the telephone only to be put on hold for 20 minutes. They are done online through websites or apps and usually don’t require any human interaction unless there is some special circumstance when it becomes necessary.
Some loan companies require a guarantor before credit can be agreed. This is someone who agrees to take on the debt if you default from it, this means the lender always gets paid back regardless what happens. Some companies will only lend money if there is a guarantor in place. This is not the case with payday loans. The agreement is between the lender and yourself only.
Payday loan companies tend to be more lenient in who they lend money to. Naturally there are implications if the money isn’t paid back, but even those with bad credit are likely to be approved for a payday loan. Many even use frequent payday loans to build their credit rating back up. Simply being approved for a payday loan and then paying it back in full at the end of its term is enough to help those with poor credit steadily get back to where they need to be in time. Those with poor credit ratings and county court judgements often use payday loans as a final lifeline to get credit when nobody else will give it to them. From here they can build their rating back up.
Unlike a credit card or a personal loan, a payday loan is only ever intended to be a short commitment. You borrow the amount you need and pay it back next payday, or over several paydays. This is a novel concept and very useful for those who only need a quick burst of cash in the here and now. Credit card companies and banks (or building societies), usually require a long-term contract between themselves and the customer, this can be off-putting for those who only need a small and temporary loan.
Just like those only wanting a short-term commitment, most people looking for a payday loan are only looking to borrow a small amount of money. When applying for a loan or credit card we often need to borrow more than we really need. There is usually a minimum borrowing limit’. Forcing those who only need £600 to borrow £1000 as an example. However, those who need a payday loan usually want to borrow even less than this. They may only need a small amount like £100, something they know they are unlikely to get from their bank. A payday loan provides the option to do this, allowing the customer to dictate exactly how much they need and how long they wish to borrow it for.
Most payday loans have online applications. Usually, you can complete this in 3 minutes and you can subsequently get a result within an hour. If approved, you can receive the cash within the day depending on the transfer times. But there will always be credit checks before you will be approved which should be taken into account when determining how fast you can get a payday loan.
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