Category Archives: Borrowing Money

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Protection For Consumers Under New Payday Loan Bill

In a new turn of events the British Government are introducing new laws to allow restrictions to be enforced on payday loan interest rates.

The Government is to make amendments to the Financial Services Bill to give the new Financial Conduct Authority (FCA – the replacement for the FSA) new powers to limit the high charges imposed by payday loan firms.

Essentially the FCA will have the power to investigate individual loan schemes and actually impose a cap on the amount of APR charged. However, it will be interesting to see how much affect this actually has – especially since an APR is an inaccurate measurement for a payday loan, given that it should be paid off by the next pay-date – i.e. by the following month. APRs are measured over a 12+ month period.

But the move does make sense – when a customer see’s an APR as big as 4000% it does cause alarm bells… but maybe this is why APR shouldn’t be used by short term lenders as a means of measure. A better representative measure would be an average interest rate over the loan period – i.e. one month.

Commenting on the new bill, Lord Sassoon said:

“We need to ensure that the Financial Conduct Authority grasps the nettle when it comes to payday lending and has specific powers to impose a cap on the cost of credit and ensure that the loan cannot be rolled over indefinitely should it decide, having considered the evidence, that this is the right solution.”

If this move makes payday lending fairer and more ethical, I for one am all for it.

Can Payday Loans Repair Poor Credit Scores - Revisited

So can a payday loan or short term cash advance really help a poor credit rating?

I was re-reading an article on payday loans and credit scores that I wrote back in November 2011 and realised that it hadn’t really answered the question.

Well – it hadn’t answered the question to my satisfaction, which is why I felt it needed addressing again – so consider this article it’s official SEQUEL!

After looking at payday loans and the way they’re administered and whether they actually appear on credit scores I finally came to a conclusion that I was happy with.

A number of years ago, when monthly cash advances first made their mark in the UK, the industry was still too fledgling and too far removed from traditional financial services for it to be considered as a credit scoring factor. However, more recent research suggests that this is no longer the case.

When you take out a payday loan with a reputable supplier – be it Wonga.com, PaydayUK or QuickQuid, the loan will appear in your credit score.

More importantly – when you repay the short term loan this will also appear on your credit score. This suggests that payday loans could be more useful than a simple emergency source of credit.

Think about it for a minute… you badly need credit to help pay bills or help buy a new car. Unfortunately no one will lend to you because your credit history is just too poor.

But hang-on a second – you’re no longer the irresponsible spender you once were. But the lender or credit card company doesn’t know that – based on your credit score.

So you turn to a payday lender for a quick, short term loan – you repay the full amount at month-end. This positive repayment is shown on your credit history – indicating that you are once again a good bet.

Now I’m not advocating payday loans as the saviour of poor credit scores… but this example surely shows you the potential.

UK Workforce Turning To Payday Loans, According to Unite

UK Workforce Turning To Payday Loans, According to Unite According to research undertaken by Unite increasing numbers of workers are turning to payday loans since their wages run out before month-end.

According to the report London-based workers are thought to borrow the large majority of payday loans for housing.

The report suggested that two fifths of workers who take out these short term loans use the money for a variety of things – including rent / mortgage, food and utility bills.

This raises concerns that if consumers are unable to meet the cost of living through wages it’s unlikely that they will be able to repay the payday loan effectively.

It should be noted that the ridiculously high APR attached to payday loans is not an accurate measurement of the interest repaid as it’s over a yearly period. However, whilst this may be the case it’s also worth bearing in mind that, if constantly deferred over a number of months, the levels of interest mounts up – leading to spiralling debt problems.

Whilst payday loans are clearly useful if you need a quick solution to help pay emergency bills they should only be used as a last resort or if you’re absolutely sure that you can meet repayments on your next payday. Otherwise it may be worth simply calling the company you owe money to to arrange a repayment plan. Whilst this may not appeal it is a safer way of controlling your debt than turning to a short term solution.

If you do need a quick solution then compare payday loans with Creditwindow.

Financing Your Business: Business Loans & Cash Advances

Find out how you can finance your business with Creditwindow.

There are a number of ways you can finance your business – whether you’re just starting out or whether you’re looking to take your business to the next level.

Unfortunately, with the state of British banks, business loans have been far harder to come by as high street banks simply will not lend, which is why Creditwindow is seriously starting to look at how we can help British SMEs get back on their feet.

Currently we’re offering a business cash advance through Working Capital – a company that can give businesses up to £500,000. To find out more about how this works please read “Creditwindow expands into business finance.”

We are also looking at more traditional business loans that are offered through banks and lenders who are willing to fund small businesses.

Let’s face it – both the Government and Bank of England claim that small business growth is the key to getting out of the economic downturn, however, they are doing very little to aid this growth.

Here at Creditwindow we believe in British business and we intend to do everything we can to find the best sources of finance for you. Keep an eye on our business loan section. We understand that one form of finance may not suit every business but we will continue to work towards supporting small business throughout the UK.

Images from FreeDigitalPhotos.net

Wonga Payday Loans... For Business?!

When I read that Wonga were entering the business loan sector I have to admit I laughed to myself… especially if their business loans work in the same way as a payday loan.

Well I took a look at the website and I was… not surprised. It’s essentially a duplicate of their standard website and they use the same “slider” system they have on their payday loan counterpart.

With a lot of businesses facing another recession and difficulty in obtaining finance the idea behind Wonga business loans is a good one, however, I have a feeling that they should be turned to as a last resort – much like a payday loan. In fact the Financial Times have already said that businesses face yearly APRs of 280%… cheaper than a payday loan but still a bit concerning when you compare it to a standard unsecured loan.

However, I’m not one to go off on an tirade like an angry politician or an ambitious journalist. I believe that there is space for an alternative form of finance for businesses – whether they turn to a Wonga business loan or look to a business cash advance.

Wonga are offering up to £10,000 over a loan period of 10 – 52 days (seems a bit short to me) and is a relatively quick, painless process.

For a small business unable to obtain credit it may be worthwhile checking out their business loan offering… it could mean the difference between business growth and stagnation. If I were in a situation where I needed this type of loan I’d certainly consider it as an option.

GetMeToPayday – A Quick Review

Whilst GetMeToPayday are not a payday loan lender they are a trusted broker in the lending industry as they have access to a number of trusted payday loan companies. Consequently they are in a good position to find the best short term loan to suit your needs.

By using a payday loan broker like GetMeToPayday usually ensures that you find at least one payday lender who will be able to lend to you. However, like any loan or credit it’s extremely important to ensure that you can repay the loan on the due date.

So what are the main benefits of obtaining a payday loan through this company?

As a broker they will obtain a loan with a reputable payday lender.

They can find the most competitive rates on payday loans.

The loan decision is extremely quick and money can be in your account the same day (in some cases mere hours).

There are obvious benefits to taking out a short term loan with a broker, however, we strongly recommend comparing payday loans and their criteria before making any decision.

CashBob Payday Loans – Don’t Let The Name Fool You

When I first came across “CashBob” I have to admit – my first thought was – “What kind of a name is CashBob?!” But, as with any payday loan firm, I decided to give them the benefit of the doubt and take a quick look at them.

On first glance I don’t mind admitting that I didn’t think much of them – the website is kind of flimsy with little information and, in a bizarre twist their opening hours are between 8am – 4pm. The majority of payday loan companies are open between 8am – 8pm (or there abouts) so that they can deal with their customer’s needs as and when they need to.

This suggests that CashBob are a predominantly digital company with little customer interaction. Whilst I personally don’t have an issue with this as I don’t necessary want to talk to a member of the customer service team it does make the company appear rather impersonal… especially to people who want that personalised service.

Having said that they are still an approved payday loan lender and they operate a responsible lending programme where they will only lend to people who they believe can repay the payday loan at the end of the month.

Like the majority of lenders they offer short term loans between £100 – £800 for the monthly term with an interest rate of £25 for every £100 borrowed. The APR is 4735%, however, as mentioned previously – this is an innacurate measurement of the amount of interest you repay as this APR is based over a 12 month period – not a single month payment.

As mentioned before – they’re very much a no-frills company but if you’re after a quick payday loan then you could do worse than using CashBob.

Sound interesting? Compare payday loans with Creditwindow to find the right one to suit your needs.

Safe Loans – Not Just A Payday Loan Company?

I stumbled across a payday loan company called Safe Loans today and was intrigued… let me tell you why.

Safe Loans work in a slightly different way to traditional payday loan companies. Rather than restricting the loan period to one month they will actually allow you to extend it to as much as 4 months.

So for people who may otherwise struggle to repay a payday loan after a month they have a little extra time to get the money together to repay it. In fact it splits the loan repayments into 4 – so you’re effectively paying what you can afford to rather than paying it all in one go.

Safe Loans have actually been around since 1989 – longer than any other short term payday lender in the market at the moment.

I was surprised by this as payday loans have only really come about in the last 10 years or so. However, short term loans have been around for far longer so I guess these guys fall into the former category – but like any finance company they have to evolve with the changing market.

Like the majority of payday loan companies they also abide by the Consumer Credit Association and are committed to treating customers fairly.

In addition to this they are very exact with their customer requirements and who they lend to. Safe Loans state that they will only lend to people who are over the age of 18, have a UK bank account (with a debit card linked to it), earn at least £800 a month, an email address and mobile phone.

So… in the most basic sense Safe Loans are a payday lender, however, they are far more flexible when it comes to their loan term.

It is important though to try and pick the shortest loan period if possible as this will keep interest rates low. The longer the period of time you borrow the loan for – the more you will have to repay.

Interested? We advise that you compare payday loans in the market before simply applying. It’s important that you find one to suit your needs.

Payday Bank – A Loan Broker You Can Trust

Unlike the other payday loan firms on our panel Payday Bank is not a lender. They work in quite a different way.

Payday Bank is what’s known in the business as a loan broker – they try to find the best, most competitively rated payday loan to suit you and your needs.

The nice thing about going through a loan broker rather than direct through a lender is the fact that they will select a payday loan that fits your requirements. Let’s face facts – one short term loan will not necessarily suit everyone (if it did then there would probably be only one payday lender).

On average the interest rates on payday loans taken out with this broker tend to be pretty much the same – which is why the representative APR is static at around 1737%. But remember – this isn’t representative of the actual interest rate you repay as this is a measurement over a year rather than the month you take the loan out for.

This still works out that you pay around £25 for every £100 borrowed – in essence you repay a total of £125.

The majority of decent payday loan companies will only lend to you if they believe you are capable of repaying the debt. Payday Bank are probably one of the more trusted brokers in the payday business – they only work with well recognised, respected lenders in the sector.

If you choose to take out a loan with Payday Bank you are in safe hands – they are careful with who they work with and the vast majority of lenders will give you the option of deferring repayments over a period of time if you do end up struggling financially.

Compare payday loans with Creditwindow:

TXTLoan Benefits – A Quick Look

TXTLoan are a payday loan company with a difference.

Like any payday loan firm they can offer small short term loans between £100 and £500 a month. However, unlile other payday lenders they also offer the ability to apply via your mobile phone.

As strange as it sounds it is actually that simple. You register on the website then, once approved, you send the company a text message and they can transfer the payday loan into your bank account within minutes!

Incredible when you think about it… according to the company it takes around 11 minutes to apply and take out a payday loan – far quicker than any other lender in the market at the moment. However, this is a little debatable as they all claim to be fast – from Wonga to PaydayUK.

Like all payday loans it’s very important not to be fooled by the ridiculously high APR quoted on the website – trust me, this is not what you repay. APRs are based over a year – remember a payday loan is only a monthly loan.

When it comes to interest rates TXTLoan are probably one of the cheapest on the market – an example quoted on the website of £100 accumulates 17% interest – so the amount the borrower repays is simply £117.

Whilst TXTLoan are not one of the longest running payday loan firms out there at the moment they are one of the most trusted and have been featured on the BBC, The Guardian and a number of other high-profile news publications and media.

They are also licenced by the Office of Fair Trading and they operate a responsible lending and treating customers fairly policy. You could do worse than taking out a payday loan with TXTLoan.

Compare payday loans with Creditwindow.

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