How Payday Loans Changed The Face Of The Finance Industry

If you have ever applied for payday loans online the chances are that you would have applied for finance elsewhere also. Remember the days when applying for a loan used to involve setting up a face to face meeting with your bank manager, providing 6 months worth of payslips and going through a vigorous interview process on what you intend to use your loan for.

The introduction of payday loans in 2007 triggered a huge change in the way customers were able to apply for a loan, with a huge emphasis being placed on a fast online application service. In comparison to the lengthy application process on offer by many of the UK’s leading Banks and Building Societies, payday lenders were now able to guarantee instant decisions and extremely fast cash transfers, something that proved immensely popular among UK consumers.

Other aspects of payday loans that proved to be more appealing to customers were the smaller amounts that were able to be borrowed. Many UK high-street Banks would only offer loan values as little as £1000 in comparison to payday lenders who offer loans as little as £50. Research has shown that up to 40% of people that require financial assistance only need to borrow between £50 – £500 with unexpected outgoings and emergency bills cited as the main reason for borrowing, something that the banks could still not offer to potential customers.

How Payday Loans Compared to Bank Loans

Online Applications

Before the emergence of payday loans, there was no online loan application process. The process to be approved for finance from a Bank could take as long as 2 weeks and involved credit history checks and 6 months of  payslips to be supplied to your branch manager. Banks were unable to offer instant decisions and many customers were kept in the dark as to whether or not their application had been accepted.

Payday loans revolutionized the application process by providing an easy online application service that guaranteed to give instant decisions on whether their application was successful. This meant that customers would know if they had been accepted for a loan in a matter of minutes as opposed to days/weeks when applying with a bank.

Smaller Amounts Borrowed

One of the main reasons credited to the growing popularity of payday loans is due to the smaller borrowing amounts that are on offer. Many lenders now offer amounts from as little as £50 with maximum amounts averaging at £2000. The smaller amounts on offer were first choice for many customers needing short term finance. Most Banks only provided £1000 minimum loan terms which were not ideal for many people needing to additional finance, however in some cases this was their only option. Smaller borrowing amounts ensures that customers do not need to borrow larger amounts if it is absolutely not needed.

Shorter Repayment Terms

As opposed to having to borrow a larger amount of money over a longer period of time, many lenders were now offering smaller borrowing amounts over shorter terms to ensure that customers were not unnecessarily borrowing more money for a longer period of time than what they actually needed. Payday loans are intended to be a short term finance solution to cover emergency or unexpected bills until your next pay date. To this day Banks and Building Societies are still unable to compete with the extremely short borrowing terms on offer from many payday lenders.

Faster Cash Transfers

With the fast online application process and instant decisions, most lenders offer same day cash transfers, some in as little as just 15 minutes. Banks and Building Societies had to undergo huge changes to their cash transfer times as the average time take to transfer funds usually took 3-5 working days. Many lenders, particularly those offering a fast online application process also offer same day cash transfers.

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How do Charge Cards Compare to Payday Loans

Using Charge cards as an alternative to Payday Loans

Charge cards are very similar to credit cards in the respect of making a purchase on your card and being able to pay for it at a later date, although it’s not as simple as paying the sum off bit by bit like a credit card using minimum payments, you have to pay the full credit sum off every month. This makes these types of cards a better option for business’ to make purchases on the company account or the people on the more high end incomes.

That isn’t it in a nutshell though there are many more things to know about the option of charge cards and here they are.

Benefits of using a Charge Cards

  1. There are no late fees so as long as the minimum repayment amount is paid usually every 30 days.
  2. There is no interest added onto the amount you spend each month on your charge card which is actually the same as a credit card if you pay off the amount due at the end of each month.
  3. Charge cards have higher spending limits or sometimes no limit at all which means you’re more capable of making bigger purchases without the added stress of not knowing if your card is going to cover the cost.
  4. Many perks of having a charge card vary from discounts, concierge services, travel insurance, reward schemes, airport lounges access and breakdown cover, if you wouldn’t like these perks you can ask for a basic card which is an alternative option offered to the normal card and may have no annual fee.

Negatives of using a charge Charge Cards

  1. They’re not always accepted be high street stores
  2. Not paying your bill could land you in a bad position as interest on your unpaid sum can be noticeably more than if you had a credit card
  3. There is an annual fee for a lot of and these can range from £40 up to £450.
  4. Your maximum borrowing term is 1 month until you have to pay off the balance which has to be paid in full on your repayment day, you can’t pay in installments over time like you can a credit card and some payday loans

Fees and charges

The fees and charges for charge cards are quite simple, you have your annual account fees and late payment fees.

Annual account fees can vary depending on which card you choose. The charges could be nothing or they could climb up to £450, this typically depends on the perks and benefits your card offers, high fee cards usually provide the benefits of concierge service, travel insurance and exclusive airport lounge access to name a few.

Late payment fees tend to be a lump sum of around the £15 mark which you will have to pay every month that you miss the repayment deadline. On top of this fee you will have to also pay an interest on your borrowed amount, as a penalty typically this interest rate is much higher than your average credit card rate in some cases doubling the interest rate.

How do they compare to Payday Loans

Some lenders offer payday loans over a longer period of time such as 3 months, with some now even offering 6 months. When taking out a payday loan you will agree/negotiate a repayment date which can sometimes depend on the maximum borrowing period on offer by the lender.

Payday loans can be repaid in monthly installments, or if the borrowing period is only for a short amount of time, the repayment amount will be automatically deducted from your account on the agreed date.

In comparison to cards, loans can be repaid in full in various installments over a longer period of time which makes them a more popular choice for many individuals struggling with personal cash flow issues There are no late payment fees when a payment is missed providing that the minimum payment has been made.

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Payday Pixie Loans Made Simple

Understanding how payday pixie loans work

Here at Payday Pixie we want to make applying for a loan as easy as possible, we simply just don’t believe in over complicating things. Sometimes, no matter how careful you are with your money, there is just too much month after your payday which is why you guys turn to people like us for some additional funds.

Payday Pixie loans only take 5 minutes to apply for and come with 4 guarantees that will help put your mind at ease.

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Unexpected Bills

Unexpected bills have been a thing of the past, present and most definitely will be a part of your future. Our loans are a short term solution to help you maintain your standard of living and fight back against those unexpected bills. We are here to provide you with a fast and transparent payday loan service with no bumps along the way.

3 Month Flexi Loans

Our 90 day flexible loan terms are a first in the payday loans industry, in other words “borrow today, pay back in 3 months”. This also helps you guys to manage your personal cash flow by splitting the cost into 3 easy repayments rather than paying the full amount back at once.

Payday loans were once seen as a loan that had to be paid back on the exact date of your next payday or you could face the risk of being hit with a huge interest rate and late payment fee… NOT ANYMORE!

No Fees

We never have, never will and have never even though about charging you a fee for using our service. We understand that if you are applying for a payday loan, the chances are you are in of need some additional finances, so it wouldn’t make sense for us to charge you a fee and make life more difficult.

By simply applying for a Payday Pixie loan you will receive a free loan offer from us based on the information that you have submitted. If you do not wish to go ahead with our offer then just simply decline it, that’s it.. It’s that simple!

Quick 15 Minute Cash Transfers

Once accepted, we aim to transfer funds to your designated bank account within 15 minutes of application. Many of our customers require fast access to finance which is why we pride our self on our incredibly fast cash transfers.

We’re Still Growing

We process thousands of loan applications every single week, a figure that we never imagined we could reach in such a short space of time. We have a very high approval rate with approximately 8 out of 10 applicants approved for a loan.

You can apply for Payday Pixie loans at any time of the day, from any device, 7 days a week… We don’t even close on Christmas day!

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Cut the cost of your weekly food bill

Save money on your weekly food bill

Have you ever gone into a supermarket for a few daily essentials and ended up coming out with a load of things that you had absolutely no intention of buying?… We’ve all been there. Supermarkets are experts at up selling, they somehow get right into our mind and subconscious without us even knowing. From their cleverly placed products specifically located at eye level to the very appealing sweets section located right next to the check out tills in a bid to just squeeze that extra bit of cash out of us.

2015 sparked a huge price war among the big UK supermarkets with the huge growth of cut price stores such as Lidl and Aldi, a price war that promises to carry on for the next few years as the likes of Tesco and Sainsburys battle back in a bid to compete with the low discount prices now on offer. With more than 1 third of Brits now using alternative methods to carry out their weekly shop such as credit cards and payday loans it’s no surprise as to why popularity with stores such as Lidl and Aldi continues to grow such a rapid rate.

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Here are our tips to save money on your weekly food bill

Price Match Guarantees

Nearly every single retailer has an online price comparison feature but what’s even better is they also offer a price match guarantee. In a bid to prevent their customers disappearing to a competitor, many supermarkets now offer a price match guarantee which basically means if you find a product cheaper at another store they will match the price.

We’ve all been there, when you purchase something and then see the exact same product available at another store for a cut price. Do your homework, compare product prices and take advantage of the price match guarantees and you will see a saving straight away!

Own Brands

Many supermarkets will produce their own brands at a hugely discounted rate. Switch to using own branded products and you will automatically see a cash saving of more than 30%. Supermarkets will usually display the more expensive products at eye level, that way it’s the first product you will see, however they always display their own branded products within close proximity… So keep an eye open!

Always use discount coupons and vouchers

Discount vouchers and coupons aren’t hard to find, you can pick up any newspaper and see a cut out offering you some sort of deal or money off a certain product…. Use them!… Many people turn a blind eye to them “it’s more hassle than its worth” but these things really add up, even if you reduce your weekly shopping bill by 50% once a month, its still a huge saving when added up throughout the year!

By following our 3 steps you will instantly see a cash saving on your monthly food bill. With millions of Brits having previously turned to alternative methods of funding in order to complete their weekly shops, the savings made can be spent elsewhere such as paying of credit cards of payday loans that have previously been taken out.

 

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