How are payday loans regulated?
If you’re concerned about the legitimacy of online payday loans, you needn’t be. The FCA provides full regulation over every type of online loan in the UK, including payday, same day loans in England. Any lender offering payday loans are required to follow the stringent specifications set out by the FCA, making the industry highly regulated and protecting customers like you. As of 2014, many of the rules and regulations surrounding payday loans changed, making the governing of payday loans in the UK even stricter.
When you visit a payday loan website, you should see details of their compliance with the FCA. You can also directly look up your lender on the FCA register itself, which can be found at https://register.fca.org.uk/. The lender you choose is required to provide full details of the fees you will pay up-front, and they are not allowed to mislead you when it comes to payments and interest. In addition, 0.8% per day is the maximum amount of interest that can now be charged for any FCA regulated same day small loans company, further adding a degree of protection to consumers.
If you’re looking for a payday loan online, and the service you’ve found doesn’t abide by these regulations, then you may be looking at a loan shark company. These illegal businesses don’t meet FCA authorisation requirements and are unlawful in the UK. Loan sharks are highly dangerous, as they may resort to blackmail or increasing your payments following taking out a loan. So it’s always best to choose an FCA authorised lender if you’d like a payday loan and report any illegal loan services directly.
Why would I choose a UK payday loan over a traditional loan?
While trusted online payday loans and normal loans are similar in some ways, they are hugely different in others. Less people are going the traditional loan route through their bank when they require cash quickly, instead of turning to the convenience and short-term option of a payday loan to finance things as and when needed. Why should you choose a payday loan over a conventional loan? The answer is different for everyone, and it does depend on your circumstances. But here are just a few of the reasons why you may want to consider a UK fast same day loan over a conventional bank loan:
Lower credit score requirements
While your credit score is checked whenever you borrow money, your bank may require a far better credit history than a payday loan service would. This is partly because you’re borrowing a small amount of money and because the interest rates may be higher on a same-day small loan, mitigating that increased risk to the lender. There’s no such thing as a no credit check payday loan in the UK, but the requirements are lower – and that can make a world of difference if you’re suddenly in need of cash for a broken car, expensive bill or anything else.
Secure and safe
If your choice of payday loan lender is FCA authorised, that means they must abide by strict protection guidelines for your data, as well as provide an entirely safe and private process for lending. This ensures your data is never leaked, sold or anything else. While conventional loans from banks don’t have this issue either, the security bonus for payday loans makes them even more appealing when you consider other benefits, such as speed and transparent pricing.
Many UK same day payday loan companies advertise same-day deposits for their services. This makes this kind of lender the perfect choice if you need access to money as soon as possible. A conventional loan process is generally slower, and you won’t get access to cash immediately – but with smaller amounts, it’s possible for approvals and payment to be completed within hours of your application. Ideal if you need to pay something today.
Fast and practical
Making an appointment at a bank, filling out applications and waiting for approval is a long-winded approach to accessing money when you need it. By contrast, an online payday loan allows you to access the applications process in seconds from any internet-enabled computer or smartphone. For the average person with a full-time job and busy life, the ability to apply in minutes online is a vast improvement over any existing option.
Clear fees and pricing
Since 2014, online payday loans companies have been required to provide full transparency on the cost of their services to their customers. That means what you see is what you get, and no nasty surprises are waiting for you. While traditional loans may be complicated with page after page of jargon, payday loans are straightforward, and you know exactly how much you’ll be paying from the start.
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How does the process work when you take out a UK payday loan?
As with any loan, the first step to getting a same day UK payday loan is to complete the online application. Typically, this will be a straightforward process. First, you’ll need to supply some personal details, including your full name, address, employment information, and the UK bank you’d like the money deposited into. Once you’ve completed the application on your end, it will then go through an approvals process on the lender’s side. This process will involve checking your credit score and confirming the legitimacy of your application. Once this is complete, you’ll either be approved for your loan or informed that you haven’t met the requirements for what you’d like to borrow.
If you are approved for the amount of money you’d like to borrow, you’ll then need to agree to the loan agreement information and details sent to you. Once you’ve virtually signed this document, the process can begin to place the loan into your account. In the majority of cases, this will be the same day – and may even be in the same hour, depending on your choice of lender. However, your bank also plays a role in the time taken for transfer, which for some accounts may be longer than others.
Once you’ve got access to the cash, you need to think about repayment. Short term payday loans are typically repaid within a month or across several months, and the repayments are usually taken by direct debit. So it’s vital to ensure you have the repayment amount available in your account on the set repayment date or dates, to avoid financial issues or problems with your credit score from missed repayments.
The process for same-day loan applications is slightly different if you go through a broker like us – your application is filled out on our platform and then distributed to suitable lenders to find an option that works best for you. However, much of the process will be the same – the difference is that you’re getting the best option for you instead of choosing a random lender that may not have the best choice for your circumstances.
What happens if I’m not approved for a payday loan?
Depending on your circumstances, credit rating and other factors, you may find that you’ve been turned down for a payday loan. If this is the case, you should not keep applying for similar forms of lending, as this can harm your credit score. Instead, it may be worth considering alternatives to a same day loan that is available to you. Such as lending from family.
There is a range of different reasons you may be turned down for a same day payday loan in the UK. It could be that your credit score shows past failed repayments on loans. It could be that you’re currently unemployed and therefore don’t meet the income requirements for a small loan. When you go through a broker, we find the most likely options for approval for you. This means we’re connecting you with the best options on the market, improving your chance of success. However, this doesn’t mean that you will be guaranteed to be approved for a payday loan today.
Which lender for a same day loan is the best option for me?
Choosing a lender can be a challenge when you’re considering a payday loan. While it’s tempting to go for the first service you find, taking a closer look at your choice can make a considerable amount of difference to your experience. First and foremost, you want to ensure the lender you choose is FCA approved and compliant, which ensures your safety and their legitimacy as a lender.
Secondly, look at the figures associated with the lender. APR is the percentage of a loan that you pay off and includes all the fees as part of that loan. You want to choose the lowest APR possible whenever you’re borrowing money. It is worth noting that a worse credit score may result in higher APR short term loans being your only option, though this isn’t always the case with specific lenders.
Reviews are also an invaluable way to check whether a lender is the right fit for you. Platforms like Trustpilot offer customer reviews of the lender’s site to provide valuable insight into whether a payday loan service is highly recommended. Of course, a lender with plenty of five-star reviews will always be preferable to those with negative reviews, but you should also be careful that the reviews are genuine. Some companies may pay for positive reviews, or competitors may pay for negative reviews.
Finally, approval rates are a great indicator if you’re looking for a broker for your online payday loan service. A platform that’s processed a large number of loan applications and achieved a high approval rate, like Cobra Payday Loans, is the ideal option. Especially when combined with the number of lenders we work with. Do your research, and finding the right lender for you will be a far smoother process.
What should I use my online payday loan for?
There are multiple reasons why you might be considering taking out a payday loan near me online. For many people, same day loans are a way to access money for emergencies quickly. For example, the car breaking down unexpectedly or the washing machine finally giving in. These kinds of cases are what online payday loans UK are best designed for. They offer a way to access cash that you can pay back after your next payday when it’s something you urgently need right now.
While long-term loans, or mortgages or car loans, are for more substantial purchases that you want to split up payment for, online payday loans for emergencies and other incidents are designed to offer a smaller amount of money for something you have to pay for now. For example, it could be a more expensive electric bill than you were hoping for, or it could be fixing your boiler after it suddenly gives up. Short terms loans may be tempting for other purchases, such as a holiday or buying clothing or electronics, but they aren’t designed for this purpose.
It’s also not recommended to take out payday loans to cover costs each month repeatedly. Same day loans aren’t designed for this, and if you’re stuck in a loop of borrowing to pay necessities, it’s important to consult with a financial help service. In addition, taking out payday loans to cover regular expenses can quickly lead to a bad credit rating and send you further into debt if you fail to make payments.
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Why should I use a broker for finding a payday loan in the UK?
If you’re considering taking out a payday loan, using a broker is the ideal option for you. As one of the UK’s top payday loan broker services, Cobra Payday Loans has a wide selection of different lenders as part of our services, each fully verified and FCA-compliant. So when you work through a broker, you get access to the best option for your money – and in some cases, a better deal.
While emergencies can lead to split-second decisions, taking a minute to go through the same day loan process with a brokerage service can make a difference. It can also ensure you’ll pass verification processes and resolve any issues as they arise instead of further down the line. As experts in our field, we’re best placed to support you through the process and find a solution that’s suitable for you.
Are there any downsides to a payday loan?
As we mentioned above, payday loans are designed for unexpected expenses or costs. They aren’t supposed to be used for regular spending. In the same way, you might use a credit card. You will also be paying interest on the amount of money you’re lending, making it more expensive than asking for a payroll advance or borrowing from a family member or friend if possible.
Not everyone is suited to a payday same day money service. But if you are and you need money quickly, then working with us at Cobra Payday Loans is the ideal choice. Get in touch with us today to find out more about our same day quick loan broker services, or use our online form above to start the process today.
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