The Dark Horse of Lending Market-Payday Loan

A payday loan is a type of short-term loan where the borrower consents to repay the loan on their next proposed payday.

Some financial dilemmas are as unexpected as they are expensive. Even with a pre-planned budget, you may find yourself struggling to settle for these pitfalls. Luckily, you may be able to get payday loans when you want them the most.

Payday loans are nothing new, but in recent times, the number of borrowers taking out payday loans has grown, and grown extensively!

Part of the basis for this growth is the fluency at which someone can obtain a loan, which is due to the 2015 Financial Conduct Authority (FCA) introduction of stringent rules on payday loans in the UK. It aimed at improving the lending market, making it better for the borrowers.

Another reason is how swiftly the loan amount can be in your bank accounts, in many cases within an hour. That’s very fast, and the proof is - £1,077,292,050 amount taken out by Brits in high-cost short term credit (HCSTC) finance in 2018.

However, the first step toward solving your emergency is to think distinctly and to get rid of the pressure. A bit more money to work with can raise the confidence you have and get you on the back on track.

Features of Payday Loans

It is a conventional financial instrument, however, it should be used only by those consumers- who know how it works.

In case you want to buy new attire, or want to give someone with an expensive present, a payday loan is not for you! It's only for necessities and not for desires!

Smart financing holds a clear understanding of all the pros and cons related to credit, and your real financial possibilities to repay the money. The main question you need to ask yourself each time you are going to apply for credit should be: “Will you be able to live on a shoestring budget or you need money severely till your payday?” If you really can’t live out, then use advantages of payday loan learning that you will have only 1-2 weeks to give the loan back plus the interest charge.

Be careful while applying for such credits. Also, get acquainted with its terms and conditions offered by the lender before you confirm a loan agreement.

The main features of a payday credit are:

• Short repayment term- typically between 22-30 days.
• A small amount of money (350-1000).
• An unsecured loan requires no collateral.
• No guarantor or co-signer required.

Things That Will Make You Say “YES” for a Payday Loan

• No long approval period to use your money.
• No need to accumulate a lot of documents to be approved.
• No risks to get rejected because of your bad rating as payday loans for bad credits is the new hit.
• No requirement to provide collateral to get funds.
• No need of co-signer, thanks to payday loans with no guarantor.

Ways to Compare Online Payday Loans

1. Pick a trustworthy lender or broker
One of the most significant trends in the payday loan industry has been the growth of loan brokers and direct lenders.

Direct Lenders

Direct lenders are corporations that have received sanction from the FCA to lend money directly to borrowers. Varying from small, short-term loans of £50 to more large sums up to £1,000.

Loan Brokers

An FCA registered loan broker acts as a medium between the lender and the borrower. They help borrowers with poor credit ratings and without any guarantor to acquire a loan that can fulfil their monetary obligations.

2. Settle on a lender with adaptable repayment options

As a borrower, it is imperative that you have access to multiple repayment options that suit your budget and repayment ability. Not all lenders offer compound repayment options. Hence, do your study and compare payday loans on free online loan comparison websites to choose the desirable deal.

3. Find a loan with low APR

Annual Percentage Rate (APR) is the interest rate that a borrower repays on top of the borrowed loan amount. Hence, always try to find a low APR rate. The process can be challenging but is an essential part of your loan comparison.

FINAL WORD

To sum it up, harsh times calls for drastic measures. Considering a payday loan will help you deal with any unplanned emergency. However, you may explore various lenders across the UK, in order to get the best credit deal.