Pay Day Loans
Getting Cash Quick With A Payday Loan
There are many reasons that you might find yourself in need of cash now, when your paycheque is still days or weeks away. If you live in the UK, the option of online payday loans has grown in popularity as a way to solve your problem. Internet access is everywhere today, even on mobile phones, so it’s super easy to apply. For those who prefer face to face service, there is a concurrent explosion in the number of local payday loans UK brick and mortar shops. Another benefit of the shops is that they can offer lower fees than online providers.
There are many companies offering the service, and it can be hard to know which one to pick. Don’t let bright colors and cute names be your only guidelines. The taking out of short term loans is a significant decision and you should take it seriously by looking critically at several lenders before you apply. In this article we will describe in some detail how payday loans work and what sort of things to look for when you are choosing a provider.
There is no need to feel ashamed about needing to ask for a little help with your finances. In 2009, more than a million people in the UK took out pay day loans, and more than 30 percent of them had household incomes above average.
Advances are becoming established as a first choice when just a small amount of money is needed to cover unexpected expenses. Typically with payday loans no credit check is made, making them a good choice for those with credit issues or who just prefer the convenience of a quick response. They fill a need that might otherwise cause borrowers to suffer overdraft penalties, or even to turn to loan sharks and other illegal means of obtaining cash. Studies have shown that those who have taken paycheque advances frequently learn from the experience how to manage money better in the future.
Instant payday loans may be taken out for any reason. You may find yourself short when the time comes to pay bills, or you may need to cover unexpected repairs on a vehicle or in the home. It may be that you could use some extra funding to make a special night out extra memorable. It doesn’t matter what your reason is and you won’t be asked. This is one of the qualities that make a payday loan attractive to many people.
The clarity of the fees and of the bottom line amount that will be owed has been named by borrowers interviewed to be the key advantage of the payday advance as opposed to other types of loan products. The speed of the transaction was the other top feature noted. Simplicity and the ability to be discreet, especially online, are also mentioned as reasons to prefer pay day loans. The short deadline helps one to keep on track in order to avoid perpetuating the debt, and many users reported that they felt more confident about their ability to keep that goal in mind than they would with a traditional long-term loan. Credit cards, overdrafts, and traditional loans were not viewed by many borrowers as being accessible to them, making the payday loans no credit check a more attractive prospect.
The simple principle of pay day loans is that your regular paycheque acts as the collateral against which the money is secured. The range of amounts that can be borrowed usually starts at 70 or 80 pounds, and, with some lenders, goes as high as 1000 pounds. There is a flat fee that you will pay. For the online merchants, it is usually about 25 GBP for every 100 borrowed, while those at brick and mortar shops tend to be less because their overhead is smaller. This fee is charged to cover the costs of doing business. Despite the popular perception, lenders do not actually make a large profit on each individual transaction.
You will also be charged interest for the duration of the loan period. The interest percentage rate is determined at the time of the loan signing and is based on the current status of the financial market, just as with any other type of loan. You should be informed whether the rate quoted to you is compounded or not, and whether the rate will change or if it is fixed. If you are not told, ask. The percentage will appear to be disturbingly high because it is based on a period of one year, but since you will be repaying within thirty days or so, the actual amount of money it represents is not very much.
These being short-term loans of small amounts, under 1000 GBP, there aren’t the same credit checks and collecting of lots of financial data as there would be for more traditional, long-term loans. You do not need to be a home owner. The only requirements are that you are eighteen or older, a legal resident of the UK, and that you have a steady job and a bank account. There may additionally be a minimum salary. Employment verification is not always carried out, especially by the online payday loans, which adds to the speed of the response. However, those who are self-employed or perform contract work are not eligible to apply. Most companies stipulate that you must be enrolled in direct deposit of your paycheque into your bank account, and that the account allows for direct debits to be drawn. That automates the process of the loan receipt and repayment for the convenience of both parties.
Another type of security that you can use in the neighbourhood shops is that you can leave a post-dated cheque for the full amount in their keeping. They will simply cash it when the loan is due. If this is the choice that you make, don’t forget to let them know if you need an extension, and be sure that the full amount will be available in your account when needed to avoid being overdrawn. You can repay directly at the shop by another means, if you prefer.
There are two types of payday advance businesses. One is what is known as a direct lender. They maintain their own accounts and funding resources, and they offer only a single product. The other sort is a brokerage. You fill out a single application for them, which is then distributed to a number of different lenders with whom they work. Then they collect the approvals and present them back to you, usually ranking them by which appears to be the best deal for your situation. You can then decide which to take.
There are of course advantages and disadvantages to both of these models of business. Direct lenders will typically have lower fees and faster service. However, there are far fewer of them giving payday loans online, so if this is the way you decide to go you may need to go to a shop. With a brokerage, you have the best chances of being approved because of the multiple lenders in their networks, but it can take longer to complete the transaction. The procedures and reputations of both types of providers of instant payday loans and the choice is really up to you, if you have a preference at all.
For most payday loans no credit check is performed. That means that if you have bad or no credit, or even if you have CCJs on your record, you don’t need to be worried that you will not be approved. Taking a payday advance does not have any influence on your credit rating, as long as it is repaid and not defaulted. A few of the payday loans UK providers do run a credit check, but will not use the information as the sole basis of rejecting your application. It will be clearly stated on the site or literature if they are using a credit check or not. Should you have any questions about a specific lender’s procedure and how they use the information, a responsible business will be forthcoming with the answers.
The application process is easy and fast, both on the Internet and on the High Street. It is, by its nature, discreet as well as convenient. No matter what lender you choose, you will fill out a short, simple form providing the relevant information. There are never any complicated calculations or requests for difficult to find financial data. Your application is immediately submitted electronically and you will receive your answer very quickly, sometimes within a few minutes. For most online providers, you will not need to fax anything or talk to anyone over the phone. If it turns out that any further information is needed, you will be contacted promptly by email. Many of the websites operate 24 hours a day, at least for customer support purposes. You may also have access to a secure online account management area, depending on the site, once you have been approved. In the shop, an agent will assist you throughout and point out any areas which may need clarification.
When you have been approved, the money will be deposited into your account or debit card, usually on the same day. If an application is placed late in the day, the money may not be able to be transferred until the next business day. Some of the payday loans UK lenders, but not all, work at the weekend. If you need weekend service, check the business hours listed. In any case, the amount of time needed to process and complete the loan will be explicitly stated. You should always thoroughly read all the information provided on a provider’s website or a shop’s literature before you decide to apply through that one.
The repayment of payday loans is generally expected within 30 days. The actual amount of time will be agreed upon at the loan signing. The shorter the term, the less interest you will end up owing. Find out if there are any penalties for paying off early, and what the consequences are of paying off late. You can usually request an extension if you should need it, but some providers restrict the number of times you can do so. 70 days is about the longest that would be permitted. It is the short-term nature of these loans that makes them a safe risk for the lenders to take and that is what makes it easier for borrowers to be approved. Don’t neglect to plan ahead so that the full amount you owe will be available to pay out at the time that your payday loan comes due.
Just as with any financial decision, you will want to be certain that you are working with a reliable business for your payday loans. All financial service providers are subject to regulations and licensing requirements that are concerned with ensuring fair business practices as well as data protection security. This is true for payday loans online, as well. Make sure that the company you choose is up to date and fully compliant with everything. Don’t just take their word for it. You can check the status of licenses with the Office of Fair Trading. Find reviews of the companies that interest you to see what impartial sources are saying. Ask friends which ones they have used. If you can’t find a single outside reference to a lender, that is one that you should definitely avoid.
One additional important reason to check out the legitimacy of the instant payday loans company you have chosen is to be sure you don’t end up at a fake website or in a phishing scam. Most people these days are pretty savvy about how to avoid such tricks and scams, but it doesn’t hurt to be extra careful. You are, after all, going to be providing them with access to your bank account. A dependable lender will only ask you to give them the routing and account numbers, just as you would provide to a third-party if you were paying a bill online. Never provide a password, PIN code, or any other information that would give anyone full access to your account. You can even check with your bank directly to find out if they have had dealings with instant payday loans in the past. If the repayment is to be by direct debit, you will be asked to authorise the withdrawal at the time it is due.
When you are looking at online payday loans, read all the information on the site carefully to ensure that you understand all of the terms of the loan, and all of the fees and interest that you will owe on top of the amount you are going to borrow. If you have any questions or aren’t sure about something, ask. A reputable lender will be happy to answer them. They want to earn your business, so customer service is generally friendly and prompt. Likewise, in a shop, there should be clear explanations of every detail. Your agent will be able to respond to your questions.
Even though short-term loans are a great solution when you need a little money quickly, they should not be taken out frivolously. They should be used only sparingly, and not as a remedy for habitually poor money management. Consider your situation with all gravity to be sure that this is the course you want to take. Do not borrow more than you can comfortably repay. Resist the temptation to take multiple loans from the same, or different, lenders at the same time – meaning, until you have repaid the original loan. You must be confident in your ability to pay the money back within the described term, or close to it. If you depend on getting an extension, keep in mind that the interest will continue to grow. Then you will end up owing more than if you had just paid it off at the end. Especially compounded interest can pile up faster than you may realise. Exercise a bit of common sense and restraint to give yourself the most positive outcome.
The large numbers of different payday loans online and turning up on every corner make it challenging to know which one to choose. You may be tempted to go with the first one that catches your eye on the internet or television, or the one you pass every day on the way to work. After all, you need that money fast. But don’t jump so fast. It is well worth your while to do some comparison shopping and carefully consider the differences among them. You may find that the lower fees at the shop makes up for giving up the convenience of applying while sitting at your computer in your pyjamas. Or the online experience may be preferable to you. The choice is yours, but you want it to be an informed one. Armed with a basic understanding of the entire process, you will be able to evaluate each company to find the one that is the best fit for your current needs.