Payday loans are becoming increasingly popular in the UK. They are short-term loans, which involve borrowing a small amount of money ideal for dealing with unexpected expenses like medical bills, appliance repair etc. Unlike other conventional loans, these require few requirements which make it easily accessible to a broader range of people with bad credit score issues.
Debunking payday loan myths:
Earlier there were many complaints regarding the high interest rate charged by lenders which made the financial situation worse for the borrowers. People were apprehensive for applying for payday loans due to the steep interest rate. Many couldn’t pay off their loan on time and were stuck in a cycle of debt.
The growing concerns were sorted by the Financial Conduct Authority (FCA). The FCA intervened and many companies who charged high interest rates were shut down. Henceforth the payday loan market started being strictly regulated with a cap on APR and interest rates and it is associated with a flat fee san hidden charge.
Applying for payday loans in the UK:
Payday loans have comparatively higher interest rate than other conventional loans but it serves as the best loan option for those who aren’t eligible for conventional loans and those who have bad credit history and poor credit store. If you are in need of payday loans visit loanpig.co.uk. They are the leading direct lenders in the UK offering transparent loans.
Their maximum interest rate is 0.8% per day and they charge £15 penalty fee for late payments. After you submit your online application, they’ll review it and if they can’t find a suitable deal for you, they’ll connect you to other popular director lenders and help you with the loan approval process.
It is recommended to apply loans with direct lenders due to the ease of process, quick loan-approval and no additional fee due to the absence of middle men. You can borrow loan amount between £50 and £1500 and repay it during your upcoming payday or as multiple instalments within 12 months. They’ll grant you loan after confirming that you meet the loan requirements.
Mainstream loans require the borrower to have a decent credit score to ensure that the borrowers are reliable. Payday loans are less stringent and have fewer requirements. A person is eligible for it if he/ she:
- Is over 18 years of age
- Is an UK citizen
- Has an active bank account
Some lenders review the borrower’s credit history before granting loans. Some may require a person to hold a stable job and provide a guarantee while some don’t do any credit checks. This accounts for the high interest rate since the risk factor is high for money lenders. There are fewer guarantees that the borrower makes on-time payments.
If you are unclear about how much final amount you owe on the due date, confirm the same with your direct lender before applying the loan and make sure you’ll be able to make timely repayments. Resort to payday loans only during emergency situations.