Payday Loans UK: Are They Worth The Hassle?
Warning: Late repayment can cause you serious money problems
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Payday loans UK are extremely popular. So many different types of people, from different social and economic backgrounds, find themselves stumped for cash when hit by an unexpected bill or fee that needs to be paid instantly. While they can generally afford to pay such a bill, they've been caught between paydays. It's the kind of situation anyone can end up in. But is it a situation you want to be caught up in? Despite being incredibly helpful in dire situations, payday loans can end up causing people difficulty. Is there a way to avoid this?
So Who Are Payday Lenders?
Before we come to talking a bit more in-depth about the mechanisms and solutions behind your payday lending problems, it's best to understand who payday lenders are and what they do. Payday loans, also known as payday advances, are generally loans of up to £500 (although this varies lender to lender) that are repaid on the day you get your next wage (hence the usage of the term 'payday'). Previously in the UK, there had been an absence of restrictions on the interest rates that these lenders could charge- meaning that people could end up paying rather ridiculous interest levels. The industry grew rapidly with many payday loan companies setting up shop - with the amount of borrowers in the UK growing four times in size from 2006 to 2009 - with 1.2 million people taking out 4.1 millions loans in 2009. The lending totalled an astonishing £1.2 billion; and, by 2012, it had reached £1.8 billion. That's a lot of people lending and borrowing a lot of money - thus demonstrating how widespread these types of loans are proving to be. The average payday loans UK amount paid out to borrowers is thought to be somewhere between £265 and £270.
Changes To The UK Payday Loan System
In the past few years, however, there have been significant changes in the UK payday loan system that has affected both the way lenders approach their borrowers, while the borrowers have been given extra rights and protections. In 2010, the Office of Fair Trading (OFT) found that, while the payday loans direct lender industry needed to do better and the government needed to introduce more radical legislation, these lenders provided a legitimate service. They were proving to be useful to help cover a gap in the payday loan market. However, after a long awaited update in 2013, the Office of Fair Trading lashed back at the industry and was very critical of their practices. So the Financial Conduct Authority (FCA) took over as the regulatory body to help better regulate the industry in 2014. This saw the authorities gain greater control and powers over rogue traders - a move that was wildly welcomed from ethical lenders in the industry, those against the industry and, of course, borrowers. This essentially ensured that borrowers are now better protected and have more rights when it comes to dealing with lenders.
Can You Get Payday Loans For Bad Credit?
There's often a perception that payday loans for bad credit are easy to get. However, since the FCA has cracked down on many rogue lenders, the application processes have seen an industry-wide improvement - which means that more lenders are properly considering if borrowers can actually afford the loan they are taking on. But what if you're one of those people who suffered as a result of these changes? Perhaps you have historically bad credit and therefore you are not eligable for a payday loan services anymore? The reality is while there will be some lender who focus on a borrower having a more recent good credit history, rather than older defaults, and of course ensuring you can afford the loan, you will be hard pressed to find any lenders who will pay total disregard to your creditworthiness. Perhaps now you have the ability to pay back these loans whereas then you didn't in the past; so why should you pay the price for past mistakes? A good lender will consider all of your circumstances.
So What Kind Of Direct Payday Lenders Can You Trust?
So given that we've discussed the more nuanced details of direct payday lenders, you're probably wondering what kind of payday loans UK lender would suit you. In the first instance, it's always best to look for alternatives. Ask your friends and family if they would be able to help you out with a loan. They may ask for very little, or no, interest in helping you out; so it's always worth a try. However, if they won't help you then a loan is looking like your only option. So do you take the chance with a single instalment payday lender? Well, it's not the only option. While payday loans can make people feel under pressure because the loan could be due in a couple of weeks (plus interest), there are other short term loan options. You could pay a loan back in instalments over 3 months or even 6 months or a year. That way you don't have to find as much money at the end of month 1. But what about the increased interest that comes from that? Well it is true that the longer you have the loan the more you will pay, so you need to assess the overall cost versus the monthly to cost to see what works for you. At True Blue Loans, we provide short term instalment loans over 3, 5 and 6 months. However, we don't charge any early repayment fees. Got the money to pay it back early? Then we'll accept it. And you'll only pay interest up until you repay.
At True Blue Loans, we're committed to putting our customers first. By coming on-board with us, we will aim to give you the short term repayment flexibility that payday loans have; but with the flexibilityof being able to pay back in instalments if you can't payback by in one go. After you have researched us you can submit your application in today via our website at https://trueblueloans.co.uk. Still want to talk to someone? No problem. Our friendly customer service team can be reached on weekdays, 9-5, at Skype number: 01284 724651; or via [email protected]