Payday Loans - Myths Busted!
- 1. Payday Loans - Myths Busted! Brought to you by Everyone musthave heard numerous rumours aboutthe paydayloanindustryandhow ittriesto trap the borrowersina cycle of debt.These rumours and mythshave createda negative image of paydayloansin most people’sminds.Thereis a need to dispel some of these myths to help people realize that payday loans can prove to be an excellent financial support in emergency situations. We are busting some of the most popular and most heard myths about payday loans. Payday loans trap the borrower in a cycle of debt Thisisthe numberone mythaboutpaydayloans.Itis importanttorememberthatpaydayloanissupposedtobe ashort- term loan.It does not functionlike along-termbankloan or a long-termcreditaccount.Payday loanis to be paidoff by the borrowerwhenhe or she receivesthe nextpaycheque.If a borrowerfailsto pay back the loan withinthe due date, then he or she can rollover the loan by paying a fee. Vast majorityof people whoobtainpayday loansmeettheirloan obligationswithoutfacinganyfinancial difficulty. Very few people get trapped in this cycle of debt because of their mismanagement of financial issues. Payday loan companies prey on poor people It is a common assumption that payday loan companies target poor and destitute people who are vulnerable to get trappedinthe cycle of debt.Infact,paydayloansare onlygrantedtothose individualswho haveasteadyincome.Payday loancompaniesrequire thatthe applicantmusthave anactive bankaccountwitha validdebitcardinorder tobe eligible to get a loan. Payday loan interest rates are too high Many people believe thatpaydayloancompaniesprovide loansata higherinterestrate than othercreditproducts. This is true;a payday loandoeshave a higherinterestrate thanothercreditproducts.But a paydayloanis a short-termloan; therefore, a payday loan lender is exposed to a greater risk as compared to a long-term loan lender. Payday loans industry is not regulated Thisis nottrue.A paydayloanlendermusthave an Officerof FairTradinglicense toofferconsumercredit.Advertisingof payday loans is regulated under Advertising Standards Authority that requires all lenders to state the APR rate in their adverts. Payday loan lenders do not check credit history of the borrower This is a myth that encourages individuals with bad credit history to obtain payday loans. It does not make sense that paydaylenders offerloanstothose people whocannotaffordtopay it back.All paydaylenderscarryout the same credit checks as other long-term credit providers such as bands and credit card companies. Most of the negative things associated with paydayloans are essentially myths. Obtaining a payday loan from a reliable payday lender does not expose you to any kind of risk of getting trapped into a debt cycle, provided you pay back your loans on time.
- 2. Regulation: Trusting the Lender It wouldbe an understatementtosaythat bothpaydaylenderandpaydayloansismuch malignedinstrumentof debt,if the naysayershadit theirway,theymightas well call itthe instrumentof death. Certainly,there isnoglamourinvolvedinlendingtothose whoare poor, distraught,andinimmediate need.Maybe that iswhy ourlarge creditunions,bigbudgetbanks,andcreditcardcompanieswill noteventouchthese clientswitha barge pole.The paydaylendersare the onlyonesthrowingalifelinetotheminreturnof higherthan usual interestrates, onlybecause the clientsare notusual themselves,typically. The Regulation in Place Paydaylendersare subjectedtostrictregulationalready.Forinstance,advertisementsof paydayloansare subjectedto ConsumerCreditRegulations,whichwere introducedin2004. Asa result,all lendersare obligatedtomentiontheirAPR inadverts.To prove that itis working,andthe governmentactivelyweavesoutthe phoniesandthe fraudulent,there have beenseveral incidentswhere the ASA hasactedonthe complaintsagainstadvertisingbypaydaylenders. Furthermore,underthe ConsumerCreditAct of 1974, each lenderisexpectedholdalicense issuedbythe United KingdomOffice of FairTradinginorderto offerconsumercredit.The ConsumerCreditAct2006 statesratherexplicitly that the OFT will considerirresponsible lendingextremelystrongly initsoverall evaluationof whetheralenderisfitto holda license ornot,and lackof compliance willleadtoseizure of the license. Importance of Payday Loans Paydayloansserve a veryimportantpurpose of fillingthe greatvoidcreatedbyorganizationsunwillingtoloanoutto those inneedof financial help.The regulationinplace iscomprehensiveenoughthatthe lender’strustisalreadyatan all time high.Overthe past5 years,paydayloanshave become the mostpopularformof debtinthe countrywithmore than 5 millionpeople takingadvantageof the quickrequisitionandaccessto fundstheysodesperatelyneeded. Anyadditional regulationmaystarve those wholarge organizationsdare nottouchfor help.Furtherregulationwould impactthe processandaccess to capital forthe workingclassmenand womenof the countrywho needitthe most. Seriousmovesbythe governmentcouldsendthese peopleintopoverty,consequentdesperation,andevencrime and homelessness.Suchdownwardspiral shouldbe avoided. Conclusion Empirical evidence suggeststhatwhengovernmentsregulate the financial sectortoomuch,anddo notprovide an environmentthatfacilitatesthe flowof cash,economiessufferfromlethargicandsloweddownratesof growth.Small businesses,low-incomeearners, andpeople wholiveondailywagesare the life andbloodof the economy.These are the people behindthe wheelsof the economy,andtheirfinancial viabilityandvitalityreflectsonthe healthof the economy.Unfortunately,those whorecognize themare the verysectorthe governmentcouldstifleif theyregulate themfurther,aslarge corporationswill notevendare helpthese people.
- 3. How Do You Know When Your Payday Lender is Ripping You Off? Paydayloans,shorttermloansor cash advance,regardlessof whatthe lendersare callingit,are easyto getapproved loansof up to a £1,000 that needtobe paidoff in 3 months’time.The conditionsof course vary,andso do the interest rates,clauses,paybackoptionsandthe comfortthat these loansprovide.Needlesstosay,paydayloansdoofferthe much neededsolutionintimesof emergencies;however,youneedtofindareliable lenderofferingadeal goodenough for itto work outin yourfavour.Followingare a numberof keypointsyouneedtoconsidertomake sure that your paydaylenderisn’touttorip youoff: Opt for Trusted Lenders Thismightseema little tooobvioustostate,butthese lendersare notso apparentto spot,andso you needtomake extraeffortstoensure thatthe lenderisreliable.Online paydayloansare relativelyeasier.Youcanapplyandget approvedwithouthavingtomake multiple tripstothe lender.More andmore paydayloanwebsitesare poppingup each day,but notall of themofferreliableloans,orare evenlegit.Keepinmindthatyouwill be givingawayyour personal informationaswell asyouraccount details,soyouneedtomake sure youaren’texposingittothe threatof identitytheftorfraud. The bestway to finda legitlenderis toapplyfor a loanthrougha broker.These brokershave alreadycheckedforthe lenderscredentialsandwillmake sure thatyourapplicationishandledbytrustedproviders. Understand the Total Cost You hearall the talkaboutAPR,but that’snot the onlyway to assessthe total cost of a loan.Just because alenderis offeringthe lowestinterestrate doesn’tmeanthathe/she isofferingthe cheapestoverall costof the loan.Sneakycosts like upfrontfeesandstringentlate paymentfeesandinterestratescancost youa lotmore in the longrun. Somake sure youcalculate the total cost of the loanofferedbefore applyingforit.There are plentyof websitesofferingpaydayloan calculatorsto make iteasierforyou to calculate the total cost. Compare Various Lenders Rule of thumbis to compare betweenatleastthree lendersbefore decidingonone,butyoudon’tnecessarilyhave to stickto three,compare thirtydifferentlendersif that’swhatittakestomake a more informeddecision.Simplycalculate the overall costof eachloan,includingthe fees,andthe probabilitiesof late paymentsandhow mucha late payment will costyoubefore decidingonalender. Paydayloansforthe mostpart are emergencyloansthatyouneedapprovedandtransferredinstantly,butdon’tletyour immediate concernsandneedsovershadowyourjudgmentorignore the longtermrepercussionsof stickingtoa payday loanthat will become aneverincreasingliabilityratherthana shortterm solution.
- 4. Your Short Term Loan Questionnaire Will I Get a Loan? Afterthe infamous‘Tobe or Notto be”, thisisusuallyone of the biggestquestionsalmostall of usaskourselvesfrom time to time.Shouldyouapplyforaloan?And if youdo, whatare the chancesit wouldbe accepted.The answertothis questioncouldrequirea15-page report if youare applyingfora traditional loan.The bankwould,of course,needtodo a thoroughbackgroundcheck,check yourdebt-to-income ratio,digintoyourcredithistory,lookatyourcurrentjob and perhapsevencheckforthe status of your personal relationshipstosee if there are anyproblemsbrewingathome that couldleadto alimonyorchildsupportconcernsinthe near future. In short,whetherornot yougetthe loanwouldrequire possibly athree monthlongscrutiny periodfollowedbyatwo monthprocessingperiodandthenfinallyyourloanisapprovedanddispatchedandyoucanfinallybookyourticketsand headoff to Chinafor the 2008 Olympics.Perhapsyouwouldneedtoinvestinatime machine first! Fortunately,shorttermloansdon’tcome withall the dumbbellstoweighyoudownbutsurelycome withall the whistlestosingyourwaythroughyour cash crunches.Butthe questionstill remains:wouldyourloanevenbe approved?Here’saquickquestionnaire tohelpyoufindthe answerswithinminutessothatyoucouldgetyour handson the loanwithinhours: Do You Have a Job? Short termloansor paydayloansare usuallyonlyavailable tothose withastable monthlyincome.Lendersrequire proof of regularincome orsalarywhichdoesn’tnecessarilyneedtobe froma regularsalary.Evenif you don’thave a proper job,youcould still getapprovedforthe loanif you have proof of any disabilityincome,alimonyorevenproof unemploymentincomewouldsuffice.Yousimplyneedtoprovide substantialproof thatyougenerate monthlyincome. Do You Have an Acceptable Credit Score? Unlike traditional loansthatrequireaclose-to-perfectcreditscoresandcredithistory,youonlyneedasubstantial numberwhenyouare applyingfora short termloan.So evenif youhave a not-so-awesomecreditscore,your applicationmaystill be approved. Do You Need a Loan of £1000 or Less? Quickloansare designedtocaterto some shorttermcash crunches.For instance,if youare fallingbehindonyour mortgage instalmentshadamedical emergencyorcan’twait until nextpaydaytogetyour handson the new PlayStation. Can You Pay the Loan Back Within Three Months? Short termloansare usuallylentfor,well,the shortterm.Paydayloansare generallypaidbackonthe nextpay dayor withinthree months.Interestratescanspike upif youare unable topay the loanon time andit couldendup costing youa lotmore.So onlyapplyforthe loanif youknow you’dbe able to payit back relativelyquick. If your answeris‘Yes’to all of the above thencongratulations,youare onlyone stepandonlya few hoursawayfrom gettingyourhandson yourshort termloan.
- 5. The Process of Obtaining Short Term Loans Short termloanscan be extremelybeneficial whenitcomestodealingwithimmediatefinancerelatedissues.Such issuescanemerge anytime,leavingyouunaware of yourfinancialrequirements.Whatdoyou dowhenyouare suddenlyinneedof money?Doyoupanic?Ordo you thinkof a solution?One of the bestsolutions,whichyoucanuse, isthe shortterm loan. Short termloansare consideredaneffectivewayof dealingwithimmediatefinancial problems.Oftenstudentsare worriedabouttheirtuitionfee andthinkof takingupa loan.Insuch cases,short termloansare a greatway to acquire loans.Thisisbecause ithelpsthe studentsensure thattheydonotfall behindonmakingpayments. So the questionthenarises,howdoyouacquire shorttermloans?Here isthe process. Get Help The firstthingthat you needtodo isget helpfromyourfinancial aidoffice.Thismeans,askingthemthe correct procedure of applyingforthe loan.Theywill guide youregardingthe requireddocumentation,whichmustbe processed before youcan be eligible forthe loan.Therefore,itisalwaysagoodideato ask fortheirhelpandguidance as theyare ina muchbetterpositiontoexplainwhatyoushoulddo. Consider repayment Options The nextthingyouneedto dois have a back plan.For what,youmightask. You shouldhave itforrepayingthe loan. Nowthat youhave made the decisionof optingforaloan,it becomes veryimportantthatyoustart discussingdifferent options,usingwhichyouwill repaythe loan.Thisisveryimportant,asyouwill be requiredtopaythe loanwithin90 days,fromthe dayyou receivedit.Duringthisperiod,youwill alsobe requiredto agree torefrainfromoptingforany otherkindof studentloan. Therefore,take adecisionaftercareful considerationof the consequences,andmake sure thatyouknow howyou will repayyour loan. Interest On mostof the shortterm loansthat are offeredtostudents,the interestratesare low,makingthemafeasible option for students.Withparttime jobs,itbecomeseasierforstudentstorepaythe loans,while payingthe interestonit. Whenyoucompare these loans,tosome of the loansofferedbyfinancial institutions,theyare consideredtobe far better.Simplypayoff the original amountwiththe interestandyouare free. So make sure that youcontact the rightauthorityforacquiringstudentloans.Shorttermloansare all youneedto pay off your fee forthe semesterandthenrepaythem.Make a planon how you will meetthe requirementsof the loanand pay itoff.Thiswill helpyouinbeingpreparedforthe paymentseverytime youneedtopayit. Nowthat youhave understoodthe procedure, donothesitate;justapplyforashort termloan.
- 6. How to Find the Best UK Pay Day Loans Services Paydayloanshave become quite popularrecently,andforthe rightreasons.Theyare much easierandfastertoget approvedandhelpyoutake care of your financial situationrelativelyeasily.Butwhathave become equallypopularare shams, cyber-crimesandsecuritybreaches.Paydayloansmightofferyouthe breakyoudeserve,buttheyare onlyworth it if youfindthe rightloanservice.FindingpaydayloansinUKisa relativelyeasytask,butfindingareliable one isthe trickybit.Followingare fewchecksandprecautionsyouneedtotake tomake sure your paydayloanservicesare worth your trustand time: Referrals The bestway to finda reliable service istolookforreferrals.Askaroundif someoneyouknow hasrecentlytakena paydayloanusingonline services.Askabouttheiroverall experience.If youare hesitanttospeaktosomeone regarding paydayloans,a simple online searchwillhelpyougetagoodideaaboutthe toponline lendingservices.There are plenty of online review sitesandforumsthatshare goodand more importantlybadexperiences.Youcanalsocheck websites’ testimonialspage tosee whattheircustomershave tosayabout theirservices.Investingalittle time inresearchwill helpyouavoidthe longtime hasslesof gettingcaughtupina loansham. Interest Rates and Policies Interestratesandothertermsand conditionsare veryimportant whenevaluatingdifferentpaydayloans.Youshoulddo a researchregardinghowa loanwill costyou intotal and read the termsand conditionsthoroughlytogeta better understandingof whatyouwill be agreeingto.Don’tjustfall fornumbersandpercentageshighlightedonawebsite but use online paydayloancalculatorsordothe mathto figure outthe complete costof a loanbefore decidingona specific service. Red Flags What kindof certificationsdoesaparticularlenderhave?Isthe lenderaskingformore detailsthanare necessaryto approve yourloan?You shouldalwaysbe onthe lookoutforredflagsto indicate badservice.The objectisnotjustto finda secure service butalsoa reliable one.If theyaskforsecuritypasswordsand/orif their responsesare delayed,you shouldnotconductany businesswiththem. Customer Support Customersupportiscrucial indeterminingthe overall service thatalenderprovides.Tryemailingorcallingthe service providerformore informationandsee how responsivetheyare.A reliableserviceproviderwillnotonlybe friendlyand supportive,butalsoinformative.Goodcustomersupportisnotonlyimportantwhenapplying,butthroughthe whole processas theyare the onesyouwill be dealingwith.Soif a service doesn’toffergoodcustomersupport,itistime to lookelsewhere. The bestway to findpaydayloansinthe UK is to lookfora reliable service providerthatofferspaydayloansfrom numeroustrustedlenders.Thiswayyoucanensure that youfind the bestdealsfromapprovedandreliable lenders. Givingoutyour personal andbankinformationisariskybusiness,anditisupto you to make sure that youtrust the rightservice withit.
- 7. Where am I able to gain free independent advice? If you feel thatyourfinancial situationwarrantsfurtheradvice before youmake the decisiontoapplyfora loan,youcan obtainthisfromthe CitizensAdvice Bureau orfromdebtcharity StepChange.Theseorganisationshave experienced advisorsthatwill be able tohelpyouwhilstalsokeepingyourinformationconfidential. Let Us help you find the right loan! Try our Clever Search Tool at https://quiddicompare.co.uk/search/payday-loans One Quick and Secure Application! Apply to all the lenders in the market instantly. Email us Partner, Lender & Enquiries: [email protected] Write to us Quiddi Hub Limited. 44-46 Windsor Road, Slough, SL1 2EJ, UK Our Licences Company Number: 07677977 Interim Permission Licence/Number: 645792 Data Protection: Z2539077