Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

How Do You Choose the Right Payday Lender?

If you are one of the millions of people in the UK looking to use the services of a payday lender, a simple Google search will throw up hundreds upon hundreds of options. So much so, that in fact being spoilt for choice could mean you are a bit overwhelmed with the options available to you and end up overlooking or missing important factors which would help you choose the right payday lender for you. Every lender is different and every lender offers different terms and conditions, so it is important to shop around to get the best deal. However, do you know exactly what to look out for? If you’re searching for a short-term loans direct lender, there are a few golden rules you need to follow.

Check That the Payday Lender is Regulated

This is probably most important golden rule any potential borrower must follow. Since regulation pf pay day lenders was introduced in 2015, there is no excuse whatsoever to go with a pay day lender that is not licensed and regulated by the Financial Conduct Authority (FCA). It is absolutely imperative that on the lenders’ website you can see that the lender is ‘authorised and regulated by the Financial Conduct Authority’. This statement normally appears at the footer of the website’s home page. Also, there should be a reference number which you can cross check against the FCA register.

Why is this important? Being licensed and registered with the FCA means that there is some protection in place to prevent you getting ripped off. The regulation implemented in January 2015 ensures that borrowers will not be required to pay back more than double what they borrowed. The cap on short term loans is 0.8% per day, and fees are limited to £15. The regulation is there in place to protect you the borrower from discriminatory lending practices. Without the protection of the FCA, you leave yourself at the mercy of the pay day lender and whatever unchecked terms, conditions and fees they wish to impose.

Look Closely at Their Website

There are certain things that you should look for on the pay day lender’s website. By law, all lenders must display the following statement on their website pages: “Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk”. It may sound trivial, but if they are breaking the law by not showing that, you have to ask yourself, what else are they breaking the law in?

You also want to know that their customer service is good and that they are contactable. Make sure they have a business name or trading name with a telephone, email and postal address. Don’t be afraid to try out their customer service; drop them a line or give them a call. If they don’t respond in a timely or professional, or don’t respond at all, then you should steer clear and find another, more responsive short-term loans direct lender. Obtaining money is just part of the service, you have to know that there will be a response should you need help or have a question that needs answering.

Another factor that needs to be considered but is often overlooked, is the safety and security of the website. Even if you are only filling in an application and not proceeding with the loan, you are handing over personal data about yourself which others are prepared to hack websites for. Any payday loans company you choose to apply must feature the highest safety standards such as SSL encryption technology and firewall protection. You need to ensure that the payday lender adheres to the Data Protection Act and have a privacy policy which is clear, understandable and lists any Credit Reference and Fraud Prevention Agencies they use.

Lastly, with regards to the website, it may sound trivial, but it is actually quite important. Look for a clear, well presented site. A payday loans website with spelling and grammar mistakes may not be legitimate and will certainly should raise concerns over the professionality of the company.

Know the True Cost of the Loan

This is one the golden rules you cannot ignore. When comparing payday lenders and getting a loan quote, there are various fees that need to be factored into the total cost of borrowing. What might seem the lowest interest rate by one lender doesn’t represent the true cost of the loan. Payday lenders generally charge fees of some sort. They may be administration fees, application fees, late payment charges and other fees under different guises. You need to choose a payday lender that when giving a loan quote, is fully transparent with what fees are being charged. This represents the true cost of the loan.

When getting a loan quote with a short-term loans direct lender, a loan calculator should show you exactly how much you will pay back. All the fees, whatever they are, will be included in the in the APR (annual percentage rate) and normally the loan calculator will give you a few different repayment date options and the subsequent APRs. Don’t be taken in by headline low interest rates. Often, low interest-rate loans will conceal high fees, which is why it is important that you use a loan calculator and always, upon always, read the small print. If you want to get the best payday loan for you, you need to ensure that you understand the exact cost of your payday loan. Look for transparency with no hidden fees.

Don’t Be in a Hurry

No matter how urgent you perceive the need for a pay day loan, you should always spend time shopping around and doing a bit of research. The worst payday loans are always the ones taken in a hurry. To make sure you get the best payday loan for you, carefully pick out the companies that match your criteria, weigh up all the different pros and cons, and maybe prepare a little comparison table and try to see in black and white which company is the best.

Even if you are looking for a same day loan, a little time spent comparing pay day lenders will mean you give yourself a far greater chance of securing the safest, the cheapest, and the best payday loan for you.

Summary

• Check the Payday Lender is Regulated and Licensed

• Know the True Cost of the Loan

• Check the Website for Security, Privacy, Contact Details and Professionality

• Test Their Customer Service

• Don’t Rush

• Do Your Research and Compare Lenders

The Right Payday Loan Deal is There. You Just Need to Find it

The payday loan market has changed considerably for the better over the last few years. Thanks to the FCA regulation, many of the more unscrupulous short-term loans direct lenders have fallen by the wayside. The regulation introduced not only offers you the consumer a degree of protection, but it also ensures that what you pay back is capped, so there really is no excuse to choose a lender that is not licensed and regulated with the FCA. However, even with regulation, fees, charges and terms differ. With that in mind you need to ensure you are fully aware of what the total cost of the loan will be including any charges that might apply. Once you have verified the website, its safety and the terms of the loan, don’t be afraid to try out their customer service; you never know when or if you might some personal assistance. Finally, take your time, do your research and you’ll give yourself the best chance of finding the payday loan deal that is right for you and your circumstances.

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