Top 6 factors to select payday lender
Everyone would like to live within her income, but life occasionally presents us with an unexpected situation wherein one is short of cash before payday. The cause could be anything, from an emergency like car break down or house repairs, or a co-pay prescription. Such a situation is stressful and embarrassing. You would consider multiple sources of loan, such as friends, relatives and bank. With none of these are you certain of getting cash advance. Further, bank loan means long forms to fill, documents to be submitted, and stringent credit check leading to delays.
A payday loan can be a good solution to your financial problem. Payday loans are more expensive than other personal loans, since the term is very short, and no credit check is done. If you repay in time, the absolute interest you pay is small, as compared to personal loans where APR may be lower, but total interest paid out over term of loan would be higher.
With so many options in payday loan industry, how do you compare and choose the best option for you and your personal situation? Here are some important factors to consider :
Direct or indirect lender?
There are two basic types of this type of lender, direct and indirect. Direct payday advance lenders issue the loans directly to the consumer without a middleman or agent. Indirect lenders are middlemen who get paid by the direct lender for referring a customer. It is a myth that if you deal with indirect lenders you will be charged an extra commission. Indirect lenders like UK Online Payday match your needs against leading direct lenders, yet do not charge anything extra. You will pay the same as you would with the direct lender. Another advantage is that since your profile is matched against multiple lenders, approval is almost guaranteed.
Effective annual interest rate
First and foremost is the effective annual interest rate. The nominal interest rate is the periodic interest rate times the number of periods per year. Nominal interest rates are not comparable unless their compounding periods are the same; effective interest rates correct for this by "converting" nominal rates into annual compound interest. The effective rate is calculated in the following way, where r is the effective rate, i the nominal rate (as a decimal), and n the number of compounding periods per year (for example, 12 for monthly compounding):
r = ( 1 + i / n )^n - 1
Other Fees
Another consideration is any other fees like whether or not there is an application fee. Legitimate payday loan providers debit any additional fee that is incurred during the process of procuring a payday loan from the amount that is deposited in your account. You should not be asked pay any upfront fees.
Transparency
Legitimate online payday loan providers give a detailed account of the payday loan repayment process as well as the interest rates they charge. Make sure you read the payday lender's charges as well as terms and conditions carefully.
Licensed Lender
UK regulations mandate that all payday lenders be registered with the OFT (Office of Fair Trading). It is recommended to check whether the payday loan provider has been issued a Customer Credit License by the OFT.
Flexible Terms
When payday arrives and the loan falls due, you may discover that you are unable to repay the payday loan. Check if the lender gives you option to extend or roll over the loan. On the other hand, you may wish to repay the loan early. You should be given option to repay loan early without any penalty charges. Interest should be reduced depending on loan outstanding duration.
The UK Onlinepayday Instant Loan Advantage
- Instant loan approval
- Bad credit history is OK : no credit check is done
- Fast Cash up to £1000 within 24 hours or same day
- Completely online loan application
- No faxing required
- Friendly 24/7 customer support on phone and email
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