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UK Payday Loans

payday loans in englandThe payday loan industry in the Great Britain has grown rapidly, with over 1.2 million people using these short-term loans in 2009 to get immediate financial relief compared to about 0.3 million people in 2006. This gives us an idea about the user-friendliness of these short-term loans which can be obtained quickly, sometimes within hours of applying for the loan, and can be repaid on the next payday.

If you’re looking to obtain a payday loan online, you should gather as much information as possible as taking out a payday loan online in the Great Britain to avoid choosing an inappropriate lender and paying high interest rates. For your convenience, we are providing all the necessary information about getting a payday online here. Read and make a well-informed financial decision.

What is a Payday Loan?

As the name implies, payday loans are short-term loans which are to be repaid in full on the next pay day. In the Great Britain, payday loans are typically loans of up to £500 with an annual percentage rate (APR) of 1000% or even more. Typically, when you take out a payday loan of £100 in the Great Britain, you are required to pay interest of £25 on it. The loan is to be repaid in full on the next payday.

Payday Loan Rules in the Great Britain

Until January 2014, the payday loan industry of the Great Britain was poorly regulated. While lenders were required to get a license from the UK Office of Fair Trending to offer payday loans, there were no regulations regarding payday loan rollovers or interest rate charged by the lenders. By law, although lenders are required to advertise the APR charged by them, the APR charged by lenders could go as high as 2000%.

In January 2014, the consumer group Which? criticised on the payday regulations of the kingdom, which resulted in new payday loans regulations. Today, a payday loan company cannot:

  1. Charge more than 0.8% of the total amount borrowed a day. The percentage includes both interest and other fees or charges.
  2. Charge more than 100% of the principal amount borrowed by the debtor, regardless of the loan term, principal amount, and interest rate or charges.
  3. Charge more than £15 for late loan payments.

If you believe that your payday loan contract violates these rules, you should first discuss your complaint with your payday lender and if they don’t resolve the issue then you can take it to the Financial Ombudsman Service.
The best way to avoid any such problems is to obtain a payday loan from a lender who is licensed by the Financial Conduct Authority. Also, if you have applied for a payday loan but you have just realized that this is not the right option for you, you can withdraw from your payday loan agreement with the lender at any time within 14 days. You will only be required to pay interest on the loan amount that you have used, the rest will be refunded without any additional charges.

While payday loans are great to pay for small emergency expenses. However, you must do an audit of your paying capacity and take out a payday loan only if you can repay it at the right time.