We’ve all been there. Too much month left at the end of the money. Two weeks until your next payday, and nothing left in the bank to see you through until then. It happens to most people at one time or another, and sometimes no amount of planning or careful budgeting can prevent you from running short. All it takes is for something to go wrong with the car, an unexpected vet bill or household expense and all of a sudden you find your bank balance taking a nosedive. Sound familiar?
With the cost of living getting steeper all the time, not everyone is able to afford the luxury of saving money for situations like this. The option of asking the bank for help through a loan or overdraft may not always be available – or even the right way to go – if you just need a small amount of money to tide you over until you next get paid, so a payday loan could provide the ideal solution.
Payday loans are designed specifically to suit people who need a short-term loan which they will be able to pay back quickly. There are lots of payday loan lenders out there, and it’s important to do your research and make sure you feel comfortable before making your decision about which company to borrow money from. Here are some things to consider when you’re looking for a payday loan lender:
Does the lender have a good reputation? Do they look genuine and are they able to answer all your questions? Don’t commit until you feel confident that you’re entering into an agreement with an ethical, legitimate lender.
Do they have a consumer credit license? In order to lend money in the UK, all lenders must hold a consumer credit license. Responsible lenders must adhere to a set code of conduct according to the terms of their license. Avoid borrowing money from lenders who don’t have the consumer credit license as they could be trading illegally.
Are you clear on what you will be paying and when? A responsible lender should provide you with a clear schedule of the repayments of any money you borrow, including the dates, amounts and how it should be paid.
How long will you have to pay back the loan?This varies from lender to lender. Some loans would need to be paid back in 30 days, others might be longer. Make sure that you will have the money to pay the loan back by that date.
How much is the interest (APR) on the loan on top of the original amount? Make sure you find out what the APR figure is on the loan. Since payday loans are designed to be paid back quickly, you should be aware of what you’ll pay in interest. Compare the rates with a few different lenders to make sure you’re getting a good deal. And don’t make any commitments until you are certain you will be able to afford the repayments.
What will happen if you can’t afford the repayments? Find out from the lender whether there would be any additional charges if a payment is missed.
Is the company a real lender or a broker?Some companies which present themselves as a lender are actually a broker, and it may work out better for you to borrow direct from the lender. If you do decide to go with a broker, do you know whether they will charge a fee?
If the lender can transfer the money very quickly after the loan is approved, will they charge you extra for this service?
There are many different types of loans available, so make sure you do your research and this will help you secure the best deal.