UK Payday Loan Lenders are a source for urgent funds for expenses that cannot wait until the next pay check arrives. They are considered a boon by people who quickly need up to 1000 in cash to tackle an unexpected expense, although one can also borrow an amount as low as 80.
Finding a legitimate loan company
There are rumours of illegitimate loan operators who follow unethical means to get people to borrow from them without fully disclosing all their terms. These fly by night operators use unscrupulous methods to lure the borrower, make false promises and get them deeper into debt.
It is very important to find a reputed UK payday loan lender who is upfront about all the costs, fees and details involved and sticks to his promises. One way to find such a lender is get a referral from family and friends who have had a good experience with a loan company. With online payday loan lenders, the research is easier as you can read online reviews, testimonials and other customers’ experiences and feedback detailing any problems that have been faced and how they were resolved.
How lenders work
When a client applies for a payday loan, the lender makes an assessment and if all the criteria are met, processes the application and transfers the money to the borrower’s bank account the same day. But where do lenders get their funds? They have internal resources and bank finance to do this. They generate their money by paying a certain cost. Their fixed costs, as expected, are high. Whatever the value of the loan to the borrower, the underwriting costs are constant.
Lenders have other fixed costs such as overheads in the form of their own staff’s salaries, rent and an investment in technology for online lending. The cost of the loan is usually highest at the application stage, especially with online applications and stem from credit checks where applicable. As the loan amounts are low, profit margins are also low.
Understanding the UK payday loan lender
Legitimate lenders practice responsible lending and this is clearly indicated on their websites. They keep track of their customers’ accounts. When a client rolls over the loan without repaying it the first time, the lender is morally responsible to get in touch and offer advice and suggest ways to overcome their financial problems.
A fair lender does an affordability check based on the essential information provided by the borrower to see how much he is eligible to borrow. A discreet salary check is also done where necessary. If the borrower applies for additional loans there is a reassessment of the customer by the lender.
In some cases, lenders allow the loan to be deferred. To protect the customer, there is a set limit in the number of times this can be done along with a ceiling on how much can be borrowed.
Getting a payday loan today has never been easier with online applications, instant approvals, and fast transfer of the money borrowed into your verified bank account. However, before you click to apply, the first step is to research your lender. Browse a few lenders to know the various criteria and expenses involved before committing yourself to one lender since unimaginably high rates of interest and financiers who trick you are not unheard of.