We have all heard the horror stories about payday loans but times have certainly changed and they are not to be seen anymore as the big, bad, nightmare of a financial service that once was the scourge of the poorer families in the UK. Where in the past the view of payday loan companies was of a leech, looking to add misery to the lives of poor people who were desperate for some help and ended up with some horrific levels of debt that would snowball out of control, these days there are instead sensible, responsible lenders that have a transparent process and can help people in all walks of life to get by for a few short days or weeks until next payday.
When you think about it sensibly though, there are millions of people around the world who have used payday loans and had no problems at all with it. Instead, they have massively benefited from borrowing money over a short period of time that has significantly helped them out of a sticky situation with finances, and paid it back next payday (or with instalment loans over a short period of a few months at most).
It is, or course, hard to ignore completely the negative press that we all associate with the payday loan sector. As the credit crunch crunched in the last ten years, and the traditional high street lenders hardened the stance of lending to anyone and everyone, there was little room to turn for many people who struggle to make ends meet from month to month, and from pay packet to pay packet. There was a time when certain areas of the payday loan sector preyed on these types of people and impacted negatively on their lives, but there is a new breed of responsible lenders that have changed the game for the better.
There has been regulatory changes within the industry that have been forced on payday loan companies, but there has also been an ethical shift from owners and managers of short-term credit services, understanding that customer satisfaction is key to a long-term sustainable business model within the sector. With this in mind one of the key considerations was to make the model as transparent as possible.
That is what you now see with many payday loan lenders, a transparent approach where it is clear from the outset what is expected of you as a borrower. From here you should understand exactly how much money you will be paying back – including the initial lump sum you wish to borrow, the interest attached to that lump sum and the amount of time you have chosen to pay back the loan, as well as any expected fees for late or missed payments. This is important as it ensures that there is a limited risk of you struggling to make repayments. A lender will only give you money if you have proven you have the income to pay back under the agreed terms, and if you do pass that criteria you should have the money direct in your bank account within 24-hours of the application.