They’ve been around since 2006 and, in that time, Online Payday Loans and online Short-term Loans have become really popular among Londoners as a primary source of finance. In fact, Londoners take out more Payday Loans and Short-term Loans than any other part of the UK but why is this?
The Oyster Loan team looks at Payday Loans and Short-term Loans in London.
London Loans – What You Need to Know.
Out of the top 10 places in the country for the size of Payday and Short Term Loans taken out, seven were in London. Ilford topped the list, closely followed by Harrow, with Croydon, Enfield, Romford, Twickenham, and Sutton. But what are the reasons behind Londoners taking out larger loans than the rest of the UK?
Number of loans
Fees & interest paid
Loan per capita
Total value of loans
The particular problem Londoners (and to a lesser extent people in the South East) have is the increased cost of living in London. Ever since the Great Recession of 2008-2009, the cost of living has risen faster in London than in other parts of the nation. For a long time during that period, house prices and rental prices rose much faster than the rest of the country although this has slowed down a lot over the last couple of years.
In 2017, the average cost of living per household as expressed in annual spend was £30,898 in London compared with the North East of England where the cost of living was £20,976, nearly £10,000 less.
Although wages have risen faster in London than anywhere else, the rate of increase wasn’t high enough to compensate workers for the rise in the price of living meaning that, in London (and in many other parts of the UK), employees were essentially getting a pay cut every year for many years on end.
The reason why Londoners borrow more on Payday Loans and Short-term Loans is nothing to do with Londoners being more spendthrift or less careful with money. In fact, it’s all to do with how much it costs to live, work, and play in London. Londoners are very good with money and they can make their money go far but, at a certain point like after many years of sluggish growth in wages, they will have to take out finance to help them keep their financial heads above water.
Payday Loans in London
Payday Loans have always been a popular choice for Londoners who need quick access to cash to help them meet emergency expenditure like a garage bill, fixing a faulty boiler, funeral expenses, and more.
With a payday loan, you agree to borrow a certain amount of money from a lender. On top of that amount is an interest charge. On an agreed day, normally your next payday or within 35 days of taking out the money, you pay the original amount you borrowed back in one go plus the interest on top.
But Payday Loans are not the only form of high-cost short term credit (HCSTC) loan that Londoners are using – the other major HCSTC loan is a Short-term Loan.
Short-term Loans in London
Payday Loans are generally for amounts between £50 and £1,000 – however, £400 to £500 is the likely maximum you’ll be allowed to borrow if you’re dealing with a lender for the time. Short-term Loans are loans that can be paid back over up to 12 months and you can borrow between £250 and £2,500 on most of them (some may offer more).
With a Short-term Loan, the repayments are smaller in monetary amounts than with Payday Loans making them more manageable from your household cashflow. However, the longer you take out a loan, the more interest you’ll pay on it over time.
With both Payday Loans and Short-term Loans, you benefit from additional protection provided by the Financial Conduct Authority. Those extra safeguards are:
- you’ll not be allowed to be charged any more than 8p for every £10 you borrow per day
- if you miss a repayment, the maximum fine you can be charged for missing that repayment is £15. If your lender tries to collect payment unsuccessfully twice in a row, they need your permission to make any further attempts
- you won’t be charged interest or fees which amount in total to more than the amount you took out for your loan.
Payday Loans London and Short-term Loans London
As with everything, it’s always important to make sure that you get the very best deal for yourself if you’re taking out a Payday Loan or a Short-term Loan. It’s pointless paying more than you need to for the finance you need – by shopping around, you get to keep more of your money in your pocket.
That’s what Oyster Loan do for a living – we professionally shop around on our customers’ behalves to make sure that they get the very best deal from their Payday Loan or Short-term Loan. How do we do this? We work with a panel of lenders, all of which are Financial Conduct Authority-licensed (just like LoanTube), and each of the lenders on our panel tells us that type of borrower they want to work with. We then match what’s on your application form and credit report with the list of criteria each lender has given us means that you get the best possible deal and that our lender gets just the type of client they want.
Once you’ve completed your application form, you get your answer back (normally) within seconds. We’ll show you how much your monthly repayments will be (or your single repayment if you’re taking out a Payday Loan), what the cost of your loan will be in interest, and other important pieces of information.
Join the Londoners using Oyster Loan to find the very best Payday Loans and Short-term Loans for them. To start your application, please click here.