How to Use UK Payday Loan Lenders for Safe, Secure Borrowing
Life is full of uncertainty, including last minute expenses that your monthly budget may not cover. When the car breaks down, for example, or your bag gets stolen. Or perhaps your best mate decides to hold his stag do in a 5* hotel in Prague.
Sometimes you can plan for these eventualities, but sometimes they take you by surprise and you need a little extra cash to tide you over until the next pay check arrives. This is what payday loans are designed to help with.
Payday loans are short term loans administered by a direct lender or payday loan lender. What began as a US phenomenon has become increasingly popular in the UK – partly because of the recession, when fewer people have ready spare cash to cover unexpected costs.
Payday loan lenders offer a fixed amount, usually between £100 and £1,000, which you can borrow until your next payday, when the money is returned to the lender alongside a standard flat fee or rate of interest.
What makes these loans different to those available from regular banks is their speed and convenience – online payday loan lenders offer a decision within minutes and can often transfer the money to your bank account within 24 hours. Unlike banks, these decisions don’t rely on borrowers having a good credit rating.
Because of this, the attendant risks are higher for the loan lender than traditional long-term loans. For this reason, fees are generally higher too, to offset the risk of borrowers defaulting on their loans. The fee often varies according to the amount borrowed – the larger the sum, the higher the fee.
Most UK payday loan lenders will publish their fees on their websites so you know the costs involved upfront. They will base their decision about the amount lent on the borrower’s income, to prevent loan applicants getting into too much debt. They will also only lend to applicants who have a steady income.
Payday loans are meant to be a short term solution rather than a long term payment plan. Because of this, reputable lenders in the UK administer other checks and limitations to ensure their clients do not perpetuate debt that they cannot return.
These checks or safety measures can include limits on the value and number of repeat loans, affordability checks carried out before a loan is made, and fixed payment dates to avoid debt being carried over and incurring higher fees. Many UK lenders will share information with other lenders to ensure people are not borrowing more than they can afford from multiple sources.
Phoenix Payroll Ltd - About Author:
Yorkshirecash.co.uk 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, so you can be sure you’re in safe hands. Find out more at http://www.yorkshirecash.co.uk/
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