What are Payday Loan Companies?
Sometimes, no matter how careful you are with your finances, you can’t prepare for everything that might happen in your day-to-day life.
The world is unpredictable, and it’s filled with things that might end up costing you more money than you have available at any given moment. Something as simple as a flat tire could easily send your entire budget spiraling out of control.
How much would you like to borrow?
Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).
When something goes wrong with your finances, the last thing you need is a conventional loan company making you jump through hoops for a personal loan. While personal loans have their benefits in the right circumstances, they’re designed for people who have time to waste on lengthy applications. What’s more, these loans are often intended to have a minimum cap on how much you can borrow. That means that you could end up borrowing £1000, when all you really need is £50.
Fortunately, you don’t have to stick to a personal loan if you need money for bills and other non-descript expenses. The world of loans has evolved drastically over the years, and lenders have begun offering different, short term loans for people who only need to borrow a small amount of money for a limited length of time.
These payday lenders, or payday loan companies can be difficult to understand at first. However, we’re here to guide you through the basics of how they work.
The Basics of Payday Loan Companies
On the surface, payday lenders are very similar to any lender.
Just like a bank or building society, your payday loan provider can offer you money in return for an interest rate when you repay what you owe. The interest rates offered by payday lenders can be a little higher, but that’s because they’re only offering you the money for a short period of time. Rather than paying interest over the course of several months – you just pay it once.
Also like other lenders, these loan providers will need to conduct a credit check to make sure that you can afford to pay back your loan. Many payday companies, including the ones that we work with here at Boutell, can reduce the impact on your credit rating when you’re applying for a loan, by performing a soft credit check first. This means that they just look at the basics of your credit rating, then decide whether you’re likely to be accepted for a loan.
The benefit of soft credit checks is that you don’t get any marks on your credit rating until you’re ready to apply for the loan in full. However, it’s worth noting that no company can offer you a loan without any form of credit check – as the FCA demands that all lenders check the credit of their customers.
While payday loan companies have a lot of similarities to traditional lenders, they also have some major differences that set them apart too.
What Makes Payday Lenders Different?
Most payday loan businesses available today operate almost exclusively online. This allows them to keep their fees and expenses as low as possible, so that they can offer you a better deal. Additionally, it also means that you won’t have to arrange an in-person meeting with any financial advisors when you’re applying for your loan, which can speed up the application process tremendously.
The process of actually applying for a payday loan is often much simpler than trying to get a conventional loan too. Instead of worrying about long waiting times and complicated conversations, all you need to do is fill out a simple application form. Your lender may ask you some questions about your monthly income and expenses, so that they can conduct an affordability check too. An affordability check provides your lender with information that they can use alongside your credit rating to make sure you’re eligible for a loan.
Once your affordability check and soft credit check are complete, your lender will usually be able to send you an offer, either for the loan amount you asked for, or something similar. Then it’s up to you whether you want to take the loan. If you decide that you do want to borrow the money, many lenders will be able to get the cash that you need into your bank account within a matter of hours. This is often much better than waiting around for a personal loan for days or weeks at a time.
Another major difference between traditional lenders and payday companies is how you pay back the money that you borrow.
When you borrow cash from a payday lender, you’re expected to pay off what you owe within a month of borrowing it – often on your next payday. Usually, this means setting up an automatic payment when you receive your next paycheck. Although the concept of paying off a loan so quickly can be daunting for some, it’s also a lot easier in a lot of ways. It means that you don’t have to worry about debt for very long, and you can get your budget back on track as quickly as possible.
What’s more, because you only have one month of repayments to worry about, there’s less of a chance that something in your life will go wrong and cause you to have less money than you need to pay your debts.
Choosing the Right Payday Company
Just as there are many different loan providers out there in the conventional world competing for your business, there’s also plenty of different loan providers in the payday loan environment to consider too. While you can always go and compare your options for yourself, this is a very time consuming process. If you’re in need of money urgently to pay for an emergency, comparing your providers might not be the right option.
The good news is that with the rise of payday lenders, brokers like Boutell have appeared too. A payday broker is someone who can simplify the process of getting the perfect loan for you. This unique company will help you to browse through your options by taking your information and the details of your loan request to regulated lenders in the UK.
Here are Boutell, we only work with the most credible loan providers, so that you know you’re going to get a loan from a company that you can trust. Those lenders will conduct a soft credit check, and let you know whether you can get a loan from them or not. From there, you get to make a confident decision about which lender you want to go for, and when you want to take out your loan.
The process can take as little as a few hours, so you can get the money that you need into your bank account by the next day. What’s more, we can also check through lenders to help you find the one that has the lowest interest and APR rates. This means that you can keep the cost of your lending to an absolute minimum.
Do You Need a Payday Loan?
As cash advance products go, payday loans, even for as little as £300 are easily some of the most straightforward lending opportunities on the market today. Even if you haven’t got the best credit rating, you should still be approved for a payday loan, because many lenders won’t take your credit rating too seriously. They know that they’re only giving you money for a short amount of time, so they’re more comfortable with taking risks.
Also, although payday lenders have had a bad reputation in the past, they’re now regulated by the financial conduct authority. This means that as long as you make sure that you’re getting a good loan product through a broker like Boutell, you’re completely safe taking out a payday loan. It’s just like borrowing any other money – except the whole process moves a lot faster.
While not everyone will need a payday loan, most people over the age of 18 in the UK will be able to apply for them when they’re in need of cash quickly, and they don’t want to worry about jumping through hoops to borrow money. If you only want to borrow a small amount of money for a short period of time, and you want to get out of debt as quickly as possible, then payday loan providers could be just what you need.
Applying for your Payday Loan
Payday loan companies offer an efficient and easy way to get money for an emergency when you need it most. When conventional lending strategies just aren’t suitable for your needs, a payday loan will help you to get the cash you need fast, without all the complexity and headaches.
You can apply for a payday loan within a matter of minutes and get the cash that you need into your bank account within hours, so you’re ready to get your life back on track in no time. You might even find that your credit rating gets a boost too! Find out more about getting your payday loan today!