Payday loans are short-term loans designed to help people make it through to payday. The money is delivered directly into a client’s bank account, and the repayment (including interest and charges) is usually due within one month. There are increasing options for longer repayment periods, usually around three months, with repayments handled in instalments. You will usually have until payday to repay your loan plus interest, but some lenders will allow you to select your own repayment period. Payday loans are not appropriate for everyone, and the expenses you could incur risk making your situation far worse if you miss repayments. So, it needs to be a carefully considered decision whether to take one out and which lender to choose if you decide to go ahead.
There are hundreds of providers of payday loans in the UK, and it can be an intimidating task when trying to identify which is a good lender you can put your trust in. The majority of UK payday loan lenders are not as good as they claim to be, and every single lender is unique. You won’t find two that are identical, so it is of vital importance that you dig deep to find out the facts before choosing a payday loan provider. With that in mind, what can you do to be certain that a payday loan lender is worth your trust?
1. Is the payday loans UK lender licensed/regulated/authorised by the FCA?
Every payday loan lender must be licensed to be operating legally. If you don’t check that a lender is fully authorised by the FCA, there are many problems you could end up facing. So, before you choose a payday loans provider in the UK, you must ascertain that they are licensed by the Financial Conduct Authority (FCA). This information should be readily available, usually in the footer of the lender’s website homepage. The information to look for is the FCA authorisation number and company registration information (business name, address and telephone number). Alternatively, you can look at the FCA register to find out whether a lender has FCA authorisation. it is essential to deal with licensed business entities because they are bound by legal legislation that will ensure your rights are protected. This is particularly important when dealing with payday loans direct lenders.
Oyster Loan is a trading name of Tiger Lion Financial Limited and is fully licensed with FCA Firm Reference Number 753151. The company is registered in England and Wales, with the office address of 71-75 Shelton Street, Covent Garden, London, WC2H 9JQ, and telephone number 0203 633 1699. Please note Oyster Loan is the Loan Broker in the UK and we work with FCA authorised lenders to get you the best deal.
2. What is their APR rate?
Once you have ascertained that you are in touch with a fully licensed payday loans provider, you can move on to learning how much they charge. UK payday lenders quote their interest rate charges as an Annual Percentage Rate (APR) which can be a little confusing, as payday loans are usually designed to be repaid within a month. The most important thing for you to know is that you won’t be charged the stated APR but a fraction of it, dependent on variables like the amount borrowed and the length of the repayment schedule. A good payday lender will inform you of the total amount you are expected to pay before agreeing on the loan, so don’t worry excessively about APR. As a general rule, however, a lower APR is always preferable.
3. Are there any hidden charges?
Some lenders tack on hidden charges, such as fees for making faster repayments, which may not be disclosed at the beginning. It is important that you do a little investigation to identify this type of thing. A good payday loans lender will charge only interest; they won’t charge you an additional fee for paying off your loan ahead of schedule. They also won’t charge extra fees like ‘processing’ or ‘upfront’ charges before any agreements are actually signed. And there might be the stipulation of a penalty fee if repayments are late, but such penalty charges should be clearly stated. And, anyway, you won’t have to pay them if you pay off your loan on time.
4. Does the lender offer online tools for loan application and management?
One of the primary features of instant payday loans that makes them so attractive is convenience. If this is a priority of yours, you should find out if a lender offers online application for payday loans, as well as processing and management tools. The very best payday loan lenders provide online account management systems, allowing you to make applications, receive the money and manage repayments easily via the online portal. One way this can be useful is that when applying for payday loans bad credit can be embarrassing to disclose; applying for payday loans online will spare you the embarrassment of going over it in person.
5. Does the lender’s website have good security features?
It is always prudent to assess the security of a payday loans lender’s website before entering personal information; any security weaknesses could expose your personal and financial details to the risk of theft. One of the simplest ways of assessing the security of a lender’s website is to check if there is a green company name next to the URL in the address bar. You should also look at the URL itself; it should start with “https” rather than “http”, as this indicates that there is protection against hackers. Don’t deal with any loan provider whose website doesn’t include these security measures.
6. What do the reviews say?
It’s always a good idea to take a look at the comments of a lender’s customers, both past and present. The best lenders will always have a high average rating. Reviews are an excellent method of getting a first-hand account of the experience of dealing with a certain payday loan company.
7. Does the lender include a disclaimer?
If a payday loan lender is responsible, they will readily prevent the information that payday loans are not an option for long-term borrowing, and they are certainly not advised for individuals who are experiencing financial difficulty. Any payday lender that doesn’t readily disclose that information is likely to not be operating in your best interests, and should, therefore, be avoided. It is your right to be fully informed of how to get the very best out of your payday loan, and also whether a payday loan isn’t a good option for you.
When you follow the directions in this article, you should be pretty safe in identifying the best payday loans lender for your needs. There may be other important factors for you to consider, such as loan approval rate and the involvement of third parties/brokers.