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How to Choose a Responsible UK Payday Loan Lender

By Phoenix Payroll Ltd Subscribe to RSS | May 24th 2012 | Views:

The phenomenon of the payday loan has reached new heights in the UK. Perhaps as a result of the recession, with its attendant pay freezes and the increasing prices of food and fuel, more and more people are turning to payday loan lenders for a short term cash injection.

Payday loans are supposed to be small amounts of money (usually around £400) which you can borrow to help you out of a tight spot until your pay cheque arrives. Interest rates are typically high and build up by the day, which makes these loans more expensive than a loan from a bank or building society, but they’re also easier to get and a lot more convenient than a bank loan.

While there are some safety measures in place (you’ll need to have a valid UK address, bank account, steady employment and be over 18), generally speaking, payday loan lenders will consider lending to people with bad credit. This means that if you struggle to borrow using traditional methods, a payday loan can help.

The flipside is the interest rates, which can reach over 5,000 APR and accumulate by the day. For this reason, payday loans are not suitable as a long-term solution for financial difficulties, but if you are borrowing a small sum for a short period of time, the rates aren’t crippling as you’ll only pay interest for the short period in which you took out the loan.

Payday loans have come in for criticism because of their high interest rates and the fact that they are relatively easy to obtain. These factors can leave some borrowers with debt that can be difficult to pay off, which leads to borrowers taking out new loans to pay off existing debt, racking up interest all the while.

Taking out a loan of any kind involves risk, for both the borrower and the lender. But with UK payday loan lenders, certain standards have to be met which protect customers. UK lenders are required to be registered with the Office of Fair Trading, for example, as a guarantee that they are genuine companies operating according to responsible lending standards.

These responsible lending standards mean carrying out checks to ensure that borrowers are only granted a loan if they can reasonably be expected to pay it back. UK payday lenders are also required to state their APR and other fees upfront, so there are no nasty surprises once a customer has accepted a loan.

Phoenix Payroll Ltd - About Author: is a payday loans lenders in UK who provides short term cash loans to the UK, giving you a break when you need it most. We lend up to £400 in cash, which you pay back on your next pay day. We are licensed by the Office of Fair Trading and we won’t lend you money unless we truly believe you are capable of repaying it. Find out more at

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