The payday loan industry in the UK is booming according to statistics from studies. Around 1.2m people have taken out payday loans in the UK. If you need a payday loan, you need to do comparisons based on what your requirements are. How do you know what are the right payday loans to compare? Check out our detailed guide on how you can compare payday loans as an alternative for loans and credit.
1. Look for whether the lender is direct or indirect
One of the biggest trends in the payday loan industry has been the growth of indirect lenders and direct lenders. A direct lender is a company that has the authorisation from the Financial Conduct Authority (FCA) to lend money directly from borrowers. This can be small short-term loans of anything from £50 to larger personal loans starting from £1,000. Traditionally, direct lenders used to be banks. However, the growth of the Internet and changes in attitudes from consumers means consumers are willing to borrow money from reputable direct lenders. Indirect lenders are different – they tend to act as a referral service to direct lenders and collect a commission from the direct lender for bringing a customer. If you have problems with your loan, it is a better idea to borrow from a direct lender because you can talk to their customer service representatives to work out your financial problems.
2. Search for the amounts that you need
The current trend now in the payday loan industry is more lenders are offering more money to borrowers in the hope of getting more customers. If you are looking for a payday loan to borrow, compare payday loans online based on the amounts that are relevant to you. For example, choose £500 and search for direct lenders that have £500 available. Between these choices, you can then choose the £500 loan that has the lowest amount of interest or the most flexible repayment plan based on what you need.
3. Look at eligibility
Most direct lenders have certain criteria that they need in order to give you a loan. Criteria can include aspects such as your age and the type of job that you have. Some lenders have other requirements such as having good credit score. You should ensure that you read the small print when you are comparing loans to see if you are truly eligible.
4. Compare multiple repayments
Some lenders offer multiple repayments while other lenders do not offer these types of repayments. Multiple repayments make it easier for borrowers to come back and they also ease the financial burden for borrowers. Multiple repayments can be compared on payday loan comparison websites. It is better to go with a direct lender that allows multiple repayments because of the changes in the economy, you keep more of your money in your pocket while keeping up with repayments.
5. Search for payday lenders that are right for you
98% of borrowers in the UK have said that accessing payday loans is easy, according to the Citizens Advice website citing FCA statistics. It is even easier to find payday loans with comparison websites. You do need to know how to look for payday lenders that suit you and you can do this by looking at the criteria that matters to you such as how long it takes for you to make repayments and how much you can borrow.
6. Discover different types of payday loans
Online comparison sites can help you learn about the different types of loans that are available. For example, if you are looking to compare payday loans, simply search for them within a comparison website. Bad credit loans are also available for the people who do not have good credit ratings because these loans also help them get back on solid financial ground. Instalment loans are also becoming popular with borrowers as more people look for lenders that allow them to repay little by little. Payday loan comparison services are ideal for borrowers who want to see diversity within the payday loan industry. You as the consumer have a lot of choice when it comes to payday loans so use comparison websites so you can find the right payday loans for you.
7. Choose loans with low APR rates
The Annual Percentage Rate (APR) is the interest rate that you will be repaying on top of your loan. If you want to build your credit rating and you need cash, you should only choose loans with low interest rates. You will not be able to borrow a lot of money but you will be able to slowly learn how to borrow money and repay it on time. Low APR rates can be difficult to find which is why using a payday loan comparison site is an excellent way to source these types of loans.
8. Choose loans based on how long they take to be received
Something that borrowers like to know is how long it will take for funds to be received in their accounts. Some lenders send the money instantly on the same day as the application, while other lenders do take longer to process loans to borrowers. If you are in desperate need of the money, you should choose the lender who can process the payment as soon as possible. Most lenders will process loans immediately as this is what borrowers want instead of waiting.
Compare payday loans to find the loan that is suited for you
Compare payday loans online is something that you should consider doing on the weekend. The consumer is the most powerful person in the finance industry – you have the power so you should use this power to find the right loans that go with your lifestyle and your requirements. Always look at the details of each loan before contacting the lender and make sure you understand how much you are repaying in interest. Comparing payday loans puts you in control of your personal finances by giving you credit and connecting you with the direct lender who suits you.