Payday Loans: Facts V Fibs
Payday Loans have been a hot topic of conversation for MPs, the Press and the general public for some time. Often portrayed in a negative fashion and detailed misuse of payday loans printed regularly, The Quick Loan Shop Ltd felt that some fibs and facts should be resolved.
FIB: THERE ARE MORE COMPLAINTS AGANIST PAYDAY LOAN LENDERS THAN CONVENTIONAL CREDIT SUPPLIERS.
The Financial Ombudsman Service revealed figures from financial products between July and September 2011 they showed:
19,259 were related to protection insurance, most likely due to the PPI fiasco
5,751 were related to credit cards
4,197were related to current accounts
1,718 were related to bank overdrafts and loans
As the figures indicate the amount of complaints issued about loans including Payday Loans was in fact the lowest complained about sector.
FIB: HIGH APRS MEAN THAT PAYDAY LOANS/SHORT TERM LOANS ARE EXPENSIVE.
The APR% advertised and stated on Payday Loans is often misleading as this is the overall percentage for a year. APR is worked out annually and as Payday Loans are for short term use only, it is extremely unlikely that you would pay the amount the annual rate indicates.
FIB: IT IS ALWAYS CHEAPER TO USE A CREDIT CARD OF A BANK OVERDRAFT RATHER THAN A PAYDAY LOAN.
There is no requirement for bank overdrafts to state typical APR estimates. This means that borrowing £200 could cost an estimated £350 after 30 days, where as a Payday Loan could cost around £25 per £100 borrowed, in turn equalling around £250.
FIB: PAYDAY LOAN LENDERS DONT CARRY OUT CREDIT CHECKS.
Responsible Payday Loan companies such as The Quick Loan Shop do carry out credit checks and the likelihood of customers being able to pay the loan back. Research has shown around 90% of applicants are refused a Payday Loan after credit and asset checks.
FIB: PAYDAY LENDERS ARE NOT REQUIRED TO ADHERE TO THE STRICT REGULATIONS THAT BANKS, BUILDING SOCITIES AND ACREDIT CARD COMPANIES HAVE TO.
UK credit legislation has faced tough and critical examination of the last few years, especially after the recession and credit crunch. Honest, transparent and responsible companies such as The Quick Loan Shop adhere to set regulations and guidelines offering advice and support throughout the whole loan process.
The Quick Loan Shop hope to rectify such fibs and show that Payday Loans can be a quick, convenient and a solution to emergency cash situations.