Did you know that payday loans are one of the only forms of unsecured loan that is not regulated by the Financial Services Authority (FSA)?
In spite of this payday loans have undergone a certain amount of regulation over the last few years with many short-term lenders obtaining a consumer credit licence (CCL) and answer directly to the Office of Fair Trading (OFT). The likes of PaydayUK is actually a member of the Consumer Finance Association (CFA), a well recognised authority and governing body that ensures it’s members practice responsible lending and treat their customers fairly.
Whilst there have been a number of so-called payday loan “cowboy firms” in the past few years, the likes of Wonga.com and PaydayUK, who are probably the longest running UK payday lender, are committed to dealing with their customers in a fair and responsible manner.
Here at Creditwindow we only offer payday loans through the lenders we know and trust in the market, payday lenders who have their customer’s best interests at heart.
But how can you know which payday loan firms to trust?
This is a fair question – when looking to take out a payday loan there are a number of things to watch out for when applying online:
1. Does the lender display a representative annual percentage interest rate (APR) clearly and prominently? This tends to be quite important as it is a requirement by the OFT to display payday loan APRs, no matter how badly they misrepresent the actual interest you repay on a payday loan*
2. Trusted payday loan companies will always be honest and up-front about what they charge their customers – the likes of Wonga.com, for example, actually have a sliding bar loan calculator on their home page that will automatically calculate the interest for you. All you need to do is state how much money you want to borrow and how long you want to borrow it for.
3. Payday lenders will only lend an amount to a customer who they think are able to repay the loan in full with interest at the end of the month, or over a number of months. As long as you are over the age of 18, in permanent employment, earn over £750 a month and have a valid bank account with debit card you will be able to take out a payday loan.
4. Decent payday loan companies will not promote a payday loan as a “frivolous” product. Payday loans are intended as a last resort – an emergency short term loan that will cover the cost of emergencies, such as a last-minute unexpected bill, car repairs or a burst pipe. However, a payday loan firm will not ask you what you need the loan for – that’s your business and what you spend it on is your business.