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Pros<\/strong><\/p>\n\n
\n- <\/i> You work with one lender, which means the efficient flow of information.<\/li>\n
- <\/i> You save fees that would have otherwise paid as a commission.<\/li>\n
- <\/i> Your loan is processed faster<\/li>\n<\/ul>\n<\/div>\n<\/div><\/div>
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Cons<\/strong><\/p>\n\n
\n- <\/i> If you are hunting for a bargain, you may have to spend more time looking.<\/li>\n
- <\/i> You don\u2019t get multiple options in one place.<\/li>\n
- <\/i> You have to research on the provider\u2019s reputation by yourself.<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div>\n
How We Rank Payday Loans Direct Lenders<\/h2>\n
We know you need an ethical payday loans direct lender that is honest and provide clear and easy to understand information about its services. The lender needs to be compliant with the Financial Conduct Authority guidelines. But most lenders do just that, so, how do you separate the good from the best? Here are the factors we use:<\/p>\n
\n- Cost of borrowing from the lender.<\/li>\n
- No hidden nor upfront fees<\/li>\n
- Same day funding option<\/li>\n
- Availability of risk-free personalised quotes<\/li>\n
- Eligibility indicator<\/li>\n
- Loan terms<\/li>\n
- Conditions for loan restructuring<\/li>\n
- No guarantor required<\/li>\n
- Bad credit considered<\/li>\n
- Instant decision<\/li>\n<\/ul>\n
Payday Loans Direct Lenders \u2013 How do they work?<\/h2>\n
Payday loans are short-term credits you go for to sustain you until your next paycheque arrives. They are suitable for emergencies or as cover for unplanned short-term expense.<\/p>\n
Most of the lenders we have discussed above will fund your application on the same day you submit your request unless you do so after business hours.<\/p>\n
Depending on your agreement with the lender, you\u2019ll pay off the loan within one 7 to 90 days of borrowing it. However, this kind of loans is not suitable for the long term. They accumulate interest daily. So, the longer you hold on the credit, the higher the cost you accrue. Therefore, you should settle such as loan as soon as you can.<\/p>\n
<\/i>Note:<\/strong> In the UK, the Financial Conduct Authority limits the daily rate of interest to a maximum of 0.8%.<\/div><\/div>\nWhat\u2019s more, you can always repay early and save on interest fees. Otherwise, failing to honour your payments may land in trouble as it will invite a penalty fee, which will only compound your financial problems.<\/p>\n
Payday Loans Eligibility<\/h3>\n
Every lender has a unique eligibility requirement you must meet, which is why you need to find a lender that meets your exact borrowing needs. \u00a0But some conditions are universal. In most cases, the criteria to submit your loan request includes:<\/p>\n
\n- UK resident<\/li>\n
- Must be 18 years of age, but some lenders go for 21 years.<\/li>\n
- Must be employed<\/li>\n
- Must have a UK bank account with a linked debit card<\/li>\n
- Must provide a valid email address and mobile number<\/li>\n
- Must not be bankruptcy,<\/li>\n
- Some lenders may not allow a CCJ or IVAs<\/li>\n<\/ul>\n
Most payday lenders target people with bad credit. That means your credit score is not necessarily a determinant of whether you get approved for a loan or not.<\/p>\n
The Need for Credit and affordability checks<\/h3>\n
Affordability and credit checks are mandatory for every loan application, whether it is a first time or subsequent payday loan application. \u00a0The FCA requires that lenders carry out credit and affordability checks of their borrowers before granting loans. The law does not exempt payday loans direct lenders either. With that, some lenders may carry out a soft or hard credit check. But as we have already stated, your score won\u2019t matter in the end.<\/p>\n
These checks are to protect the borrower from borrowing more than they can manage or afford to pay comfortably. Affordability checks compare your income to your expenses and establish whether there\u2019s room for left for repayment amount that won\u2019t get you into problems. That way, the lender can tell how much credit you may get.<\/p>\n
For example, if you are already holding another payday loan, it might affect the amount of the new loan you can have. As such, you may qualify for a smaller amount or may not even qualify at all. But it all depends on the lender\u2019s unique eligibility requirements.<\/p>\n
Repaying Payday Loans<\/h3>\n
Once you have received the loan, you must begin repaying them as per the lender\u2019s developed schedule. You must pay the loan amount, interest, plus all the applicable fees.<\/p>\n
Lenders require you give your bank and debit card details to allow continuous payment authority (CPA). With the CPA, the lender automatically withdraws the repayment from your account periodically. However, you must ensure your account has sufficient funds. If you don\u2019t, your bank may charge you overdraft fees or the lender may penalise you for failing to honour your payment in time.<\/p>\n
A reputable lender will alert you a day before they make they draw you\u2019re your account. And since you are dealing with a direct lender, you can reach them quickly to let them know if you are facing any financial difficulty.<\/p>\n