Since 2001, the demand for short term Payday loans in the United Kingdom has massively increased. According to the latest survey by ‘Customer Focus’ the variety of Payday loan users in the UK has reached 1.2 million, which makes the industry roughly 1.2 billion pound a year.
There are many reasons why borrowers turn to Payday Lender companies, this is greatly due to the requirements banks ensue, such as a good credit rating and debt position, causing many who apply to banks to be refused. Payday Lenders often do not perform a credit check and only require proof of your current employment to be able to offer you a loan, as the loan is given on the basis that you will pay it back in full with added interest on your next payday. If you pay back your loan early, the costs to you for borrowing the money will be reduced and that money refunded to you.
Payday loans or advances were often principally designed to help people out in emergencies, helping them survive between their paydays. Most Payday Lenders, give clients the choice to borrow between £100 and £1500. All money borrowed will incur a repayment cost based on the companies advertised APR (annual percentage rate). For example; on most Payday Lender websites, if you were to borrow £100 you would pay an extra £20- £30 in lender costs. Though the advertised APR for many Payday Lenders is anything up to 2500%, this is how much you would pay if your loan was spread over a full year, so do not be put off as loan costs are much lower than this. The interest is still higher than if you went to a bank, but Payday lenders, can afford to charge higher rates, as their service is quicker, easier and more widely available due to its fewer restrictions.
There a many Payday corporations doing enterprise in the UK at the moment with many more expected to enter the business soon, with the increases in demand for these services. Due to the hardships of economical times, many people are having to turn to these Payday Lenders to get by one month to the next. On account of building competition among loan lenders, consumers or UK payday loans can get quicker loans in much less time, with a lower cost, that what was previously available.
One of the many advantages of the Payday Lender industry is that you can apply for a payday loan from the comfort of your own home, filling in a simple application form, which does not ask for any credit information, and sit back and wait for the almost instant verdict. Payday Lenders have a much higher approval rate than banks and building societies, as they take very little into account. As long as you are aged between 18 and 55, live in the United Kingdom and have a permanent source of income, which you can prove, then you are guaranteed to be accepted. With the lighter restrictions of an online lending company, a payday loan is a breeze to obtain.
A payday loan is absolutely the quickest method to obtain cash, whenever you need it as it will often be deposited in your account, the same day or within 24 hours of your application. Paying back your loan is also just as simple and stress free, on the day your payment is due, the loan company will simply deduct the borrowed quantity plus the agreed lending fee from you account.
In summary, the advantages of using a Payday Lender to gain a short term loan, are the ease of applying, with minimal stress and no financial background check to worry about, receive the money within 24 hours, ability to apply 24 hours a day and 7 days a week and money deducted straight from bank, in a hassle free manner.
The criticisms of Payday Lenders include; extorting people who are already in financial difficulty to make a profit, High interest rates and their advertisement schemes which encourage people to borrow money which they could potentially do with out, but why go with out when money is so readily available and easy to attain.