MoneyTalk – What are payday loans?
Welcome to a new series of blogs where we will talk about all things money. These friendly blogs are easy to understand and will help explain some of the money related topics that you may find confusing or difficult to understand.
In this month’s blog we will help you to understand more about payday loans, why payday lenders have changed recently, and what to look out for when applying for a loan.
What are payday loans?
Payday loans are cash loans that come from short-term lenders, known as payday lenders. Payday lenders are companies that will lend you money for a very short amount of time. Usually, these types of companies are used when you only need a little bit of extra money to tide you over for a couple of days, until you get paid. That’s why they are called payday loans.
Who are payday lenders?
Most payday lenders such as Wonga, Quickquid, and Sunny were often used by people who needed cash in a hurry. The attraction of having an instant cash loan in your bank within minutes made them a popular choice for short-term loans. However, you may have heard in the news recently, that most payday lenders are no longer in business.
Why have payday lenders disappeared?
For a long time, payday lenders would charge their customers a very high amount of money to have a loan with them. These companies often used the information on a customer’s credit file to decide how much that customer should pay back. Often these costs would spiral out of control, making them unaffordable for the person who took out the loan.
In time, many people complained about the high amounts of money they were charged for taking out a loan. Companies like Wonga and Quickquid were ordered to pay back large amounts in compensation. Because the companies couldn’t afford to make these payments, they had to close down.
Where can you get a loan from now?
Even though many of these companies have disappeared, there are still lots of companies that will charge you a high amount of money to take a loan out with them. Don’t worry though, there are lots of fair and affordable loan companies out there that you can turn too if you need a cash loan, including Moneyline. We believe that everyone should have access to fair and affordable credit.
What should you look out for when applying for a loan?
Applying for a loan can seem scary at first. There are lots of numbers involved, and terms and conditions to think about. If you’re having difficulty understanding the information related to taking out a cash loan, ask to speak to an advisor. At Moneyline, we like to speak to all our customers over the phone or in one of our branches. That way, we can explain everything to you clearly and make sure you understand all the details. It’s important that you know how much money you can borrow, how much you will pay back, and how to let us know if you need help at any point.
With loans from £100, a Moneyline loan can help with life’s emergencies. Visit our website www.moneyline-uk.com to find out more.