Payday Loans Online – How Do You Apply?
£50 – £5000
Representative 277.5% APR Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed). The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances.
Before you even decide to take out a payday loan and submit your application to a potential lender, you should ask yourself first whether or not that certain lender is legit. After all, not all lenders are legal and the loans industry today is rife with scams and shams and as much as possible, you want to avoid dealing with them. If you want to enjoy legit loans and enjoy easy application with quick payouts, this article will show you how.
What exactly is a legit payday loan?
A payday loan can be considered legit if the lender offering it abides by certain rules and regulations sanctioned by governing bodies like the FCA or Financial Conduct Authority. These rules and regulations apply to both online and offline or in-store lenders. Typically, though, payday loan lenders operate in a less rigid atmosphere (regulation wise) than traditional lending institutions. Unlike banks, payday lenders can provide loan services to people with bad credit, lower incomes, and those who are receiving benefits from the government.
This flexibility, however, leaves payday loan companies with far greater risk than banks since the type of credit that they offer are unsecured or do not require any form of collateral. Lenders justify this risk by putting higher fees on their loans although they will still have to stick to FCA mandated APR’s otherwise they will be dealt with accordingly. Lenders will also charge extra fees for late payments and loan extensions making loans quite costly if you don’t stick to your repayments.
Steps in Avoiding Payday Scams
You always want to avoid taking on a bad deal from scam artists and here are 5 steps to protect yourself from the dangers of illegal lenders.
1. Keep an eye for proper license – The FCA provides licenses to companies that wish to operate as legal lenders in the industry. It is imperative that you keep an eye for this license when you are considering a loan service because licensed lenders are obliged to adhere to FCA regulations (which are generally geared on protecting borrowers) otherwise their legal rights will be revoked. Thus, if you encounter some sort of problem or misunderstanding with a licensed lender, you have far more protection on your side.
Fraudulent lenders, on the other hand, are either unlicensed or operating outside the UK so they would be free from the jurisdiction of the FCA. These are the types of companies that you should be very careful of because every business transaction that you make with them is virtually unsafe.
2. Be Wary of Hidden Fees – Just like in any legal deal, you should always go through the terms and conditions presented to you with great care before putting on that signature. As you go over the terms, keep a keen eye on hidden fees that are designed to exploit unsuspecting borrowers. The FCA has put a cap on the maximum amount of fee-per- £100 borrowed that lenders can attach in their loan offers. Try to check what the fee is on your loan, so you will know whether or not you are being charged right.
3. There is no such things as advance fees – Advance fees and charges are common ploys that scams use to make money from unsuspecting costumers. These dubious services will often require borrowers to send money to address taxes, application processes, and the like. If you encounter a lender that asks you with such, then it’s a good bet that you’re dealing with a sham. Legitimate payday lenders will never charge you in advance. They will only collect fees when your payment is already due.
4. You can easily reach them – Reputable lenders are always responsive to their costumers and when there are questions, they always deal with them professionally through the phone, email, and other effective means of communication. Better yet, there are lenders who provide physical venues where you can talk with their representative one on one to address any and all questions and concerns. You want to avoid lenders who only provide an email address as means of contacting them. The company should also provide a physical address of their office to their customers as proof of authenticity.
Indeed, the loan market is teeming with scams and exploitative operations, but with the right knowledge, you can always protect yourself from dubious companies and find reputable lenders that will provide you with the kind of service that you need. Use the steps provided by this article in identifying the fake from the real so you can enjoy instant loans that can work for you.