Whilst there has been much criticism in the Media in recent times - with very good reason since some Lenders were too aggressive and charged too much for their service – the Financial Conduct Authority has vastly improve the Regulation of the Short Term loans business leaving only those Lenders who strive to provide a genuinely helpful service at a fair rate.
*Important*: Please ensure that you only make applications to registered and regulated Lenders, ideally members of a Trade Association such as the CCTA, for example.
When you choose a Short Term Lender, consider all the benefits that lender may offer however be mindful of any additional charges. APR rates can be misleading as they are calculated for borrowing over 12 months while Short Term loans are typically over 30 days. Still, the APR’s are still a useful measure when used against other Lenders offering the exact same service.
We highly recommend you choose a lender that is signed up to the Good Practice Charter since you will receive fair and just treatment from them. It is imperative that you ensure the lender has a current Consumer Credit License; this number is usually at the bottom of the website. Whilst looking, check that they have their Company Number and Data Protection Number evident too.
Failing to pay on time will often result in additional interest and charges being applied to your account. Lenders may also look to take further steps, including legal action, if you repeatedly fail to meet your repayments or enter into a Re-payment Plan. The additional interest varies from lender to lender but it should be clearly displayed on their website and it is your responsibility to ensure you have read and understood those charges. Generally, repayments on your loan are taken from your bank account automatically via a process known as Continuous Payment Authority (CPA) - this is an automatic debit from your debit card. Should you have insufficient funds in your account at the time the payday lender attempts to debit your account, you will incur additional charges. Additional charges and interest will result in your total balance due to increase - sometimes significantly. Some Lenders, like www.thequickloanshopltd.co.uk do not use CPA.
Therefore, you must try to repay your loan on time and ideally, repay early since the new rules dictate that interest is charged at no more than 0.8% per day.
If you absolutely cannot repay, contact the Lender immediately and discuss your situation with them, explaining clearly what has changed and offer your proposal for repayment under a Payment Plan.
If you are unable to reach an amicable solution, please contact moneyadviceservice.org.uk or any debt advice charity such as StepChange.co.uk; they will give you free and impartial advice.
The majority of payday lenders report your borrowing and repayment history to the Credit Bureaus. If you continue to avoid a debt or fail to make repayments, this will reflect negatively on your credit score and you will find it more difficult to obtain further credit in the future. For relatively small loans, the implications of a negative report from a payday lender on your credit score can be severe.
Generally, we do not recommend rollovers or extensions. If you feel that you require more time to pay then you should contact your lender immediately. For the lenders that offer rollover options, you will usually be charged one month’s interest and possibly an extension fee. In some circumstances, lenders may automatically roll your loan over until you instruct them otherwise - you should check this within your payday loan terms and conditions. New guidelines insist that a customer cannot roll a loan over more than 2 times.
The best advice available is that you only ever borrow what you need, and not a penny more and that you repay the loan when you agree to. It can be tempting to borrow more than you need, particularly with lenders that offer varying credit limits however you must remember that you have to pay it back - with interest.
For the most part, people looking for payday loans are struggling financially and may be living beyond their given means, often through no fault of their own. This could be an indication that you need more structured financial help and you may find it more useful to speak to a debt support charity.
You should never take a payday loan out on a whim, you must ensure that you have fully researched the process and costs involved, and that you have exhausted all other means of raising the funds. Ask yourself: 'Do I really need this Payday Loan?'
If you do, then speak to your family and friends first, everybody falls into some financial difficult at some point in their life and there is no shame in asking for help.
TheLenderConnection.co.uk is a Loan Comparison Service offered as a no-fee service by The Quick Loan Shop Ltd.
TheLenderConnection.co.uk a Trading Style of The
Quick Loan Shop Ltd
registered in England and Wales.
Registered Number: 08046177
Registered Address: 31 Dashwood Avenue,
High Wycombe, Bucks, HP12 3DZ
Consumer Credit License Number: 650559