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If you’re in the market for a loan quote, you probably already know that there are many differences between lenders. Clients will do well to pause before simply clicking on a payday loan offer and accepting it without comparing it to others. It is better to conduct comparison shopping. Believe it or not, lenders don’t always follow the same script. While the FCA requires that all UK payday loan providers follow the rules, not all companies have your best interests at heart.
PCWs – price comparison websites – make it easy for you to compare one loan provider to another. These aggregator-style platforms have already conducted the necessary legwork so that you are assured of the best loans based on your preferences. Experts recommend taking the following 4 points into consideration when comparing loans online:
• Does the Lender Offer Progressive Products? – This is somewhat of a novelty to many folks, but many lenders are rather one dimensional in their offerings. Some lenders will allow you to borrow at better rates, and for larger amounts as you prove yourself a good payer. According to the Payday Lending Market Investigation Report by the CMA, most people who use these loans are repeat customers.
• Do You Understand the Loan Quote and Offerings? – It is important to have complete transparency when you compare loan quotes. For example, there shouldn’t be any fees, commissions or charges that you’re not aware of. Everything should be provided to you upfront, including the loan’s due date, the APR (annual percentage rate), associated fees, and the total due. If it’s too confusing to understand, don’t sign on the dotted line.
• Do You Know the Nature of the Company You’re Dealing with? – Not every company that poses as a loan provider is one. Some of them are there to collect your information and sell it to other companies who will then spam you with their offers. These are known as middlemen, and they profit from having your information in their database. It’s always better to stick with direct lenders, to avoid potential fraud, scams, cyber security threats, and a relentless stream of phone calls.
• Where Is Your Lender? – UK customers should only deal with UK lenders. Reputable loan comparison sites will only provide you with fully licensed and regulated UK lenders. If the lender is abroad, it may not play by the same rules. Lenders located outside the FCAs jurisdiction may charge higher APRs, and subject you to unfavourable terms and conditions.
Price comparison websites are not without their problems however. Many customers tend to avoid these websites for many reasons. For example, a loan provider that offers what appears to be an incredible deal is typically chosen without any additional investigation. Customers are insensitive to APRs if they are in arrears. Many customers are eager to get their hands on the money, thinking that it will be easy to repay the loan, therefore not worrying about the interest -related payments. Also, when lenders downplay the importance of credit scores, and price comparison websites simply offer all loan providers in that same category, customers may not always get the best deal.
The payday lending sector still suffers from a poor reputation from before the FCA clampdown. Many customers tend to avoid new and potentially trustworthy lenders, in favour of lenders with a strong online presence. If price comparison websites only promote a handful of loan providers, clients may be missing out on other lesser-known payday loans online. Price comparison websites are only as effective as the quality of the loan providers they promote. Lesser-known loan companies may not always get top billing on the Internet, or in the media, to their detriment.
Now that you know about some of the challenges you may face when shopping around for loans, it’s important to put a plan into action to get the best deal. For starters, every payday loan company should be fully licensed, and regulated by the FCA. Any company that isn’t, should instantly be disregarded. Check out several payday loan comparison websites, and notice where they overlap. Next, search for the best deal based on how much you need to borrow, and the duration of time you need to repay that loan amount.
If you have exhausted all options, your credit score is poor, and you need cash in a hurry, you are more likely to make a bad decision. Fernovo’s technology makes sure that doesn’t happen. With a system allows for an anonymous credit review, you can still be eligible for a reasonable loan without any added stress. So, it is important to take your time, do your research and find the best lender for you.