Why Payday Lending Can Offer A Solution To Urgent Bills

 

Why payday lending can offer a solution to urgent bills

No matter how sensible we are with our cash, there are always occasions when money doesn’t stretch as far as you might like. Unexpected repairs, bills you forgot about and special occasions you didn’t prepare for, are all reasons why you might need to access credit quickly. If you don’t have any savings and your friends or family can’t help you out – you may need to try another avenue and this is where a payday loan can be useful. These are some reasons why payday lending can offer the perfect solution for urgent bills.

 

Cheaper than credit cards

It may be more cost effective to use a payday loan, than a credit card for your emergencies. If you manage to pay your loan back on time, you won’t have any further interest to pay and it can be more costly to use other means of funding. The good thing about payday loans is that the money is credited into your account, so you know where you are with it. This is different with credit cards, as it often doesn’t really feel like you are spending money!

 

Quick and easy

The application process for a payday loan is often a lot quicker and easier than for other types of credit. In general, you would receive your cash on the same day or at least within 24 hours, if there are no problems. If you need to make a payment quickly, or you have a special occasion and don’t want to worry about cash – this can be the perfect answer. An application for a payday loan should only take a few minutes to complete, which is a lot less hassle than for other means of credit. You usually don’t need to supply any other information, other than your income and bank details.

 

Higher acceptance rate

While other financial institutions will make you jump through hoops before you get credit, payday lending companies have a higher acceptance rate, with less focus on a perfect credit rating. If you have less than perfect credit and need access to urgent funds, this can be a better solution.

 

Lower criteria

With many other loans or credit cards, you are required to tick a lot of boxes before you will get credit, but this isn’t the case with payday loans. If you are aged 18, have a current back account and you are in employment, you can quality for a payday loan. This lower acceptance criteria can make payday loans a much more feasible option.

 

Flexibility

It doesn’t really matter to the payday lender what you plan to spend the money on, you can take it out for all purposes. This is often not the case with other lenders, who require specific details on your intentions for the loan. This greater flexibility can make payday loans a more attractive open than other types of credit.

 

Extensions

Although this is not an option to take lightly, you do have the option to extend your repayment date, if you need to. This is an option which is not usually offered with bank loans or credit cards. You either pay it on time – or you suffer with extra fees if you don’t. This means that if the worse happens and you really can’t afford to pay the loan back on your next pay day, you don’t have to stress too much about it. You can usually just roll it over until the next month, however, it is best if you can pay it back when it is due.

 

Loan increases

If you pay your payday loan back on time, you may be given access to higher amounts in the future. You will generally start off with a small loan, but this can increase if you need to return to your payday lender in the future. This type of trust and loyalty is not something which is usually present with other means of credit.

 

Improve credit rating

If you have no credit rating or a poor score and need to make improvements, a payday loan can be a good way to do it. As long as you make repayments on time, every month – your credit rating will start to increase. It can be a good way to start on your financial journey – as long as you are sensible and don’t keep extending your loan.


6 Ways To Make Money Quickly

 

6 ways to make money quickly

An unexpected bill has arrived or you completely forgot your rent is due and you have no cash left in your account. Sound familiar? This could be a complete disaster, but before you start panicking, there are things you can do to get cash quickly, so all is definitely not lost here. Believe it or not, many of us find ourselves in these situations and more often than we would all probably care to admit. Taking positive action is an important way to cope with these situations, sitting around and worrying will definitely not do anything to solve it. These are some methods you might want to use to make money for your bills as quickly as possible.

 

1. Sell online

There are probably loads of items just lying around your home, which you could quite easily sell on to make some extra cash. It may not be much, but every little helps in these situations. Quite often, debtors will be happy to accept at least some kind of payment, so anything is much better than nothing. Sell your items on eBay, Amazon or even Facebook groups and you never know how much you could end up making.

 

2. Do some freelance work

If you have some useful skills and experience, you might be able to pick up some freelance work from websites such as Upwork. There are usually projects you can work on, which due to the urgent nature, will probably pay out quite quickly. Alternatively, you might want to ask around to see if anyone needs some odd jobs taken care of around their home or even try some dog walking or babysitting when you have spare time.

 

3. Ask friends and family

No one really likes to go to their friends and family when they are down on their luck, but if you really need some cash – they will understand. It happens to everyone at some point and anyone who is worth being in your life, will not look down on you for asking for a loan. The good thing about borrowing from friends and family is that you can get the money quickly and means you are not robbing Peter to pay Paul. However, it is a good idea to only ask friends and family who you think have extra cash to spare, as otherwise you might put them in a position to lend money when they can’t afford it.

 

4. Payday loans

Although there should always be careful consideration when taking out any kind of debt, payday loans can often act as a lifeline for many people in these kinds of situations. As long as you can definitely afford to pay it back and you take into account the interest on it, payday loans can help you deal with any finance shortfalls, so you can pay your bills on time. If your friends and family are not able to help and you need the money quickly, payday loans can offer a quick and easy solution. Payday loans are usually paid out within the same day as the application is made, which is ideal if you are in dire need of some funds.

 

5. Get an advance

It might be impossible, but if you don’t ask, you won’t get. If you have exhausted other avenues, it may be worthwhile asking your boss if they could give you an advance until you get paid. This is probably a more common request than you might think and you never know what the answer may be. Some companies just won’t have the capability to do this, while others will be happy to help out. Have a quick word with your boss and see what they say.

 

6. Temporary assignments

If you are working part-time or have some spare hours over the weekend, have you considered taking on a temporary assignment. If you contact recruitment agencies in your local area, you never know what work they might be able to offer you. The great thing about this is that you are usually paid weekly, so it can be a good option if you need your cash quickly. It is important not to over-work yourself but even if you do this for a few weeks, you will feel a difference in your wallet.


Payday loans – your complete guide

Payday loans – your complete guide

 
If you are a bit low on cash and an unexpected bill arrives – it can leave you in an awkward situation. You may be tempted to ask your friends and family for a loan, but this can be embarrassing and most people don’t really like this option! Another choice is to take out a loan or credit card from your bank, but if you have a low credit score, this can often be impossible. However, there is another option, in the shape of a payday loan.

 

What is a payday loan?

A payday loan is for short term funding needs and is designed to be paid back on your next pay day. It is ideal for occasions when an emergency bill arises and you don’t have access to funds to pay it. It can also help for special occasions when you don’t have any spare cash. Many people find a payday loan useful for tiding them over until they get paid again and although these loans tend to have a high interest rates, they are cheaper than other options, such as unauthorised overdrafts and some credit cards.

 

Who can apply?

If you have a UK bank account, you are over 18 and you reside in the UK, you can apply for a payday loan. There is no guarantee that you will be accepted for the loan. However, it is generally a lot easier to get accepted for a payday loan than a bank loan or similar. In some cases, the payday lender won’t even carry out a credit check.

 

Application process

The application process for a payday loan is generally quite quick and easy – it shouldn’t take longer than a few minutes. As part of the application process, you will be asked for your personal details; including your employment and income. This will be used as part of the credit check or decision making process. You can also decide how much you want to take out for the loan, and the scale will usually be from as little as £50 to several thousand pounds. It is unlikely that you would be accepted for a high value loan, unless you have already had payday loans with the lender before. You also decide on the duration of the loan; anything from a few days to a month. The interest paid on the loan will be determined by the value and duration and these will be transparent on the application. The decision will be made on your application and if accepted, you will usually be paid into your account on the same day or the next working day.

 

Paying it back

Your payday loan will be automatically debited from your account on the specified date. However, you can pay it back early and this is recommended; as your interest rate will be lower if you do this. If you need an extension on your payday loan, it will be at the lender’s discretion. You should always get in touch with the lender, if you are having difficulties paying it back, as they will be able to help. If you ignore it, you will end up with higher charges and your credit rating will be adversely affected.

 

Benefits of payday loan

There are many benefits to payday loans, especially if you can’t get credit elsewhere and you need your funds quickly. They are quick and easy, and your funds are usually available on the same day, so these are ideal for emergencies. The application forms don’t take long to complete and the criteria is much less strict than other financial institutions.

 

The drawbacks

Although there are benefits to payday loans, you should be wary about taking these out, as the interest rates are higher than many other types of loans. You should ensure you can pay it back on your next pay day, otherwise you could find your financial situation a lot worse. It is important to work out your budget, before you take out a payday loan and what you can realistically afford to pay back. You should not consider payday loans as a source of income, they should only be used in emergencies, when there are no other options available. Payday loans can be great, if you manage them in the right way. As long as you do this, they can be useful for emergencies.

 

 


Is a payday loan a better option than an overdraft?

Is a payday loan a better option than an overdraft?

In an ideal world, no one would ever need to take out any kind of finance; but this isn’t the reality of life. There are always going to be times when you feel a little more short of cash than others and at these times, you might need a bit of a helping hand. It may be that you are behind with your rent, you have just received an unexpected urgent bill or maybe you just really need a holiday! Whatever the reasons for a financial shortfall, you are probably weighing up your options as to what kind of financial credit to opt for. There is, of course, the option of a bank loan. However, these are extremely difficult to get nowadays and you may only need a small amount of cash, so a bank loan might not be the best option. What about an overdraft or payday loan to deal with your emergency funding needs?

 

Payday loans

These are short term loans which are designed for those times when you need access to funds; quickly! You can usually borrow as little as £50 to as much as a few thousand pounds – depending on the purpose and how much you need. The good thing about payday loans is that you don’t usually need to pass a strict credit checking process and the funds will be deposited in your account the same day or the next working day, on most occasions. Payday loans usually have high interest rates, but if you can afford to pay it back when it is due; you won’t incur any further fees.

 

Overdrafts

If you are experiencing financial issues and you need access to funds, it may be tempting to just let your bank account go overdrawn. In many cases, banks will have a facility to allow you to do this, so that you can still pay your bills. Some may even let you continue to take out cash, even when there are no funds in your account. This is great, right? How generous of them! Well, not when you start to see the fees for taking out an unauthorised overdraft! Of course, there is the option of authorised overdrafts, but these are often either not available as part of your bank account or you may not have a good enough credit rating to get access.

 

Overdraft vs payday loan?

When it comes to choosing between a payday loan or allowing your bank account to go overdrawn; the payday loan may be the most favourable option. With a payday loan, the fees are transparent. It is clear how much you will need to pay back, so you are not under any delusion. However, with overdrafts, it can be a bit hit and miss. Many banks will charge as much as £10 per day for every day you are over your overdraft; which definitely adds up over the course of a month.

 

Benefits of payday loans

There are lots of benefits of taking out a payday loan as an emergency means of credit; as long as you pay it back on time. Payday loans can be accessed quickly and the funds are usually available in your bank account, either on the same day or the following day. You have the freedom to choose how much you want, so you may just want a small amount to cover a bill or you may need access to a substantial figure. It is at the discretion of the payday lender, but ordinarily, you would need to take out a few payday loans and pay them back on time, before you would be considered for large sums of money. Another positive of payday loans is that the criteria is a lot less strict than it is with banks, so even if you have a less than perfect credit rating, you will still be considered for the payday loan.

 

What to do next?

It is important to take steps to manage your financial situation, as this will save you the need to use either or any other options like these. However, these things happen to all of us – so take time to work out the best option for your circumstances and set out a budget so you don’t find yourself in a similar situation in the future.

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I can’t get credit! What can I do?

 

 

 

I can’t get credit! What can I do?

If you are applying for credit and constantly receiving rejection letters – it can be highly frustrating. Lenders will check your credit score before deciding whether to accept your application and if they feel it is below par, they will reject your applications. Quite simply, lenders want to be 100% sure that you can afford to pay it back, otherwise they will be reluctant to allow you access to additional funds. Unfortunately, this means your finances are not in a good state, but there are options available to you. These are some steps you may wish to take if you are frequently getting rejected for credit.

 

Do you need the credit?

Firstly, it is worth taking the time to work out whether you really need the credit or not. It is often the case that borrowers get themselves in a panic when an unexpected bill arrives and rather than looking at other options, they instantly attempt to get credit. It is important to make use of other options first. For example, your friends or family may be able to help out or you could ask for an extension on the payment date. You should only apply for credit, if you really need it.

 

Check your report

It may be that you are unsure why you are getting rejected. Maybe you believe your finances are in a good state and are confused as to why you can’t get access to credit. In this case, you should take a look at your credit report. It may be that there are some errors on your file which need to be rectified. The sooner you know where you stand with your credit, the easier it will be to make some changes.

 

What is the criteria?

When you know your credit score, you will be in a better position to understand your options. Lenders have different criteria when it comes to accepting applications and if your score is below the criteria, there is no point in applying, as you won’t be accepted. Always check the criteria before you make your application.

 

Stop applying!

If you are desperate for some extra funds, it can be very tempting to keep applying for credit, in the hope that someone will accept your application. However, this is the last thing you should do – so, if you are getting rejected, stop applying! Your credit report could be negatively affected every time you are rejected for credit, which means you could make your situation worse, rather than better.

 

Try a payday loan

Everyone experiences situations when they really need access to funds, but with pay day weeks away, they have no other options. In this case, it may be worth applying for a payday loan. A payday loan gives you access to funds quickly in an emergency and these are a good solution if you urgently need to pay a bill. Payday lenders tend to be a bit more lenient with credit scores than other financial institutions, so can act as a lifeline for many. If you decide to go for this option, just make sure you only take out a loan which you can afford to pay back on your next pay day. The last thing you want is to add more to your debt, so be careful when exploring this option.

 

Get good at budgeting

The only way to improve your current financial situation is to take a look at your finances. Quite simply, you shouldn’t be spending more than you are bringing in, so careful budgeting is important. If you are getting rejected for credit, it is down to your current situation; but there are always improvements you can make in this area. It is a good idea to sit down and take a look at what you are spending your hard earned cash on, as you are bound to find some ways to make savings. For example, if you are buying takeaways twice during the week, you could make savings by making your own meals instead. Could you walk to work instead of taking public transport? These may seem like small amounts, but over the course of a year, can really add up. The smarter you become with your finances, the more money you will have, which means less need to take out credit.

 

Boost your score

The only way to start getting accepted for credit is to improve your credit score. It doesn’t matter how low your score is at present, you can improve it. If you have outstanding debt, make arrangements with the lender to pay it back. Take a break from applying for credit until you have made some drastic improvements.


5 Top Tips For Effectively Managing Your Payday Loan

 

5 top tips for effectively managing your payday loan

Payday loans are short term loans, designed to be paid back on your next pay day. These are primarily for people who have an emergency, such as urgent car repairs, home repairs or important bills which need taken care of, and don’t have enough funds available. Borrowers apply to the payday lending company and if they meet the criteria and pass the credit score, they are credited with the funds into their bank account.

Quite often, this happens within 24 hours and borrowers make the decision on how much they want and how long for, but the payday lending company will ultimately decide on the maximum amount. Borrowers are able to take out further loans if they pay it back on time and there is also the option to extend the loan payments.

Benefits of payday loans

Although payday loans have higher interest rates than banks and other financial institutions, there are many benefits in using this kind of finance option. The criteria for payday loans is usually a bit more lenient than banks or credit cards, so borrowers who have a lower than perfect credit score may also be eligible to receive these funds. Another benefit is that you can gain access to the funds quickly, which is ideal for emergencies that we all have at some stage or another! However, although there are benefits, it is important to manage your payday loan so you don’t negatively affect your credit score. These are some of the ways to ensure you take care of your payday loan effectively.

 

Do you really need it?

Short term loans have higher interest rates, so it is important to take the time to decide whether you really need the loan. Could friends or family help you out? Do you have any savings you might be able to use? Is there any way you could pay the bill later? Make sure you are clear that there are no other options before you apply for the payday loan.

Determine your budget

When making your application for your payday loan, you will be asked how much you would like to borrow. Although it may be tempting to take out a £3,000 loan to pay for a nice holiday and shopping spree, it is not advisable. You should only borrow the amount you need and can afford to pay back on the due date. It is worthwhile taking a bit of time to determine your budget and how much you can realistically afford to take out.

Can you pay it back at end of the month?

Although these short term loans are designed to be paid back at the next pay date, there is usually an option to decide on the duration of the loan. You should consider whether you will be able to pay it back on your next pay day or if you have too many outgoings at that time and need a longer period. It is important to be honest and realistic with yourself about your budget, as this will make it easier to manage.

Budget throughout the month

The loan repayment will be an extra burden on your finances, so it is advisable to try and be careful during the month so you can afford to pay it back and don’t leave yourself short of money. There are always ways to take better care of your finances. For example, spending less on treats throughout the month or taking public transport instead of spending money on fuel. In doing this, it will make it easier to make your repayment, while still ensuring you have enough cash to get through the month.

Always be upfront

If something unexpected happens and you can’t afford to pay back your loan on time, get in touch with your lender and explain the situation – they may be willing to extend the loan for you. Many borrowers bury their heads in the sand, or worse still, take out another payday loan from another company. You will find that your lender will be sympathetic to your situation and will usually be willing to accommodate you. It is important to get in touch so your credit rating is not affected. You should get in touch as early as possible before the repayment date.


Payday Loans over the Christmas period

The Christmas period is that one time of year when our finances and budgets really get put under pressure! All this “trying to save money” talk gets thrown out of the window when it comes to buying presents for our families and friends. Not only does the majority of our monthly salary get spent on presents and food in preparation for Christmas Day, but there are many more bank holidays in this short period of time than any other month of the year.

Everyone loves a bank holiday, especially because its a day off work for most people, but bank holidays around Christmas time are particularly more expensive than any other. Most people will use the festive bank holidays to hit the shop Christmas sales or visit friends and family for a meal or a drink which means spending money! Not only do we naturally spend more money on a bank holiday, as many families will be out trying to make the most of it, but the New Year bank holiday is particularly expensive and quite frankly overpriced.

Many companies have come under fire for their constant increases in costs and charges on New Years Eve/Day most commonly bars, restaurants, travel agents and taxi firms who all increase their prices by as much as 100%. To put it simply, it’s almost like Payday Pixie doubling the interest rate on a payday loan just because you applied for it on New Years Eve, seems unfair right? Sadly there is no sign of this ever stopping with New Year rates creeping up almost every year. With many families really being plunged into financial difficulty at this time of year, it’s no surprise that more and more are turning to additional finance options such as payday loans in order make it through the month.

December and January have the highest number of payday loans applications

December is also the one month of the year when us British spend the most money throughout the entire year, with estimations that the average person will spend double in December what they would in any other month! Work Christmas parties, buying presents, food and alcohol all contribute to the amount that we spend over the festive season and as a result is the most popular time for people to take out payday loans.

December is quite an unusual month in which people will tend to get paid 2 weeks earlier so that they have the finances in their bank account to shop for Christmas presents and ensure that they are able to prepare for Christmas Day. However with December’s paycheck coming 2 weeks earlier, this also means that you have to try and last an extra 2 weeks until your next paycheck, usually in late January.

Although being paid a months salary just 2 weeks after your previous paycheck on paper sounds amazing, in reality many people struggle to budget and make their paycheck last until their next payday. Research has shown that 45% of UK consumers fail to save any money at the end of their paycheck, so imagine trying to last an extra 2 weeks without pay.

The festive period all the way through to the end of January is officially the most common time for UK consumers to turn to an additional source of finances. Payday loans continue to be the number one choice as a borrowing option over this period due to the fact that you can still apply and receive your payday loan on national bank holidays, something that banks and other short term lenders simply can not do.

With many banks closing over the Christmas period and with their rigorous application process that can take up to 2 weeks more and more people are now turning to short term loan providers to borrow in smaller amounts as opposed to the minimum £2,000 amount set by many high street banks.

Christmas is a very expensive time of the year, don’t be caught short on your finances. For a payday loan you can apply with pixie 24 hours a day, 7 days per week… And we don’t even close for Christmas!

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Why payday loans could save you money long term.

Payday loans have often been in the spotlight and have received their fair share of bad publicity and news due to some lenders charging high interest rates and unrealistic repayment terms. Since the FCA stepped in to put a tighter grip on the payday loans industry, many lenders have been left with no option but to change their borrowing terms to suit customers or risk facing a huge financial penalty/fine.

There have been a number of high profile penalties and fines to various payday lenders with the most notable being issued to the UK’s largest lender, Wonga. Wonga were forced to write off more than 330,000 payday loans to UK consumers, due to their manipulative interest rates and charges that left many customers in greater financial difficulty. The total fine that was issued as a result was over £220 million and was used to pay compensation to previous Wonga customers who were financially hit by charges and interest rates.

Since then, the payday loans industry is more competitive than ever with interest rates being lowered with immediate effect. Payday loans are currently at their cheapest, and it is thanks to all of the lenders that are currently battling for customers that interest rates are as low as they currently are. Not only have interest rates on payday loans been made more affordable, but the repayment terms have also changed massively. Instead of having to pay the full cost of your loan back in a big lump sum on the agreed date, many lenders now allow you to spread the cost over 3 months with 3 equal monthly payments. This makes the repayment process easier as a customer does not have to ensure they have the full amount in their bank account, instead they have up to 3 months to repay the total loan cost, similar to the repayment process on a personal loan.

The biggest benefit of a payday loan is that you can borrow exactly how much you want for the exact amount of time that you need it for. There is no need to borrow a larger amount for a longer period of time, resulting in unnecessary interest charges and fees. Personal loans do tend to have lower interest rates, however they also have minimum borrowing amounts and payment periods, usually a minimum of 6 months.

Although the interest rates may prove to be cheaper than a payday loan, in many cases you are forced to borrow a larger amount due to many lenders only offering minimum borrowing amounts of £1000 over a minimum of 6 months. Payday loans are now becoming extremely flexible in the way that you can borrow as little as £50 up to £2000 over the space of 3 months. Many people are now turning to payday loans as opposed to personal loans due to their short term borrowing solutions and amounts that can actually help you save money rather than borrowing a larger amount that what is actually required.

In addition to this, a personal loan is usually agreed with yourself and a lender, most commonly your bank and takes on average 2 weeks to receive the funds. On the other hand, payday loans online can be agreed and transferred into your account in just 15 minutes, which is why they prove to be so popular with UK consumers.

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Fastest way to borrow? Instant payday loans

We have all had times when we need almost instant access to additional finances, whether we have been hit with the dreaded emergency bills or have accidentally overspent for the month. There are many different methods to borrow money, from credit cards to arranged overdrafts. But which method is the fastest to give you the additional funds that you so desperately need.

Arranged Overdrafts

Overdrafts arranged with your bank enable you to have some sort of financial cushion when you seem to be approaching the limit of your bank balance. Overdrafts will allow you to go into a negative amount of money with no additional fees. For people who are constantly approaching their bank account limits, an overdraft could be ideal for you to give you that added peace of mind.

By arranging an overdraft with your bank, this could prevent you from taking out smaller payday loans in order to help you through to your next payday. For example, if you have nothing left in your bank account but are due to be paid in a few days, rather than taking out a payday loan in order to help you make it to payday, an overdraft will enable you to essentially borrow the £50 from your bank with no additional charges, the £50 will just be automatically deducted from your next paycheck.

The only downside to overdrafts is that many banks are reluctant to give them if you have a damaged credit rating. However when approved they can offer a huge amount of help in the short term.

Credit Cards

Credit cards are a very reliable financial companion to have in your back pocket. A credit card will enable you to spread the cost of any purchases that you are making in a certain month in order to help with your cash flow. You can borrow money on a credit card but usually have to pay back the borrowed amount within 30 days before being hit with any interest payments. Although credit cards are not as cheap as overdrafts, they can be used more sparingly to help manage your monthly finances and stay on top of bills and outgoings.

For example if you have an outgoing of £100 but are unable to cover the cost of the outgoing yourself, your credit card could step in to make the payment on your behalf and enable you to pay back the total amount within 30 days which can prove a massive help with your monthly cash flow purposes.

Personal loans

Personal loans are a popular choice with many UK consumers with many people taking out personal loans with their bank or building society. Personal loans usually take a couple of weeks to be approved by your bank due to the numerous credit and personal checks that need to be carried out. Personal loans are more of a long term borrowing method with many banks offering a minimum repayment term of 3 months minimum. This means that if you only intended to borrow the funds for 1 month, you would have not option but to spread the loan over 3 months which would incur unnecessary interest rate charges as you will be borrowing for a longer period than what is actually needed.

Instant Payday Loans

The fastest and most common method of borrowing is to take out a payday loan. Payday loans are usually transferred into your bank account on the very same day of application and come with a minimum borrowing term of just 7 days, which means you can borrow for exactly the amount of time that you need to. Payday loans are used as a financial alternative to help guide you through to your next payday with the amount borrowed automatically deducted from your next paycheck.

This type of borrowing is seen as the most common and fastest way to finance that is available throughout the UK

Payday pixie offer instant payday loans and short term loans with no credit checks, which enables us to maintain our 15 minute cash transfers to our UK customers.

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First time borrower? Our guide to Payday Loans

Payday loan couple apply

It can be quite a daunting task when applying for a Payday Loan, with many different lenders promising different deals on interest rates, borrowing terms and repayment dates. We have come up with a number of points that first time borrowers need to look out for when making a decision on which lender to apply with.

Payday loans are still a relatively new way of borrowing for many people. Although there are huge amounts of people that choose payday loans over other borrowing solutions, only a small percentage of those have actually applied/taken out a payday loan previously.

Payday Loans for first time borrowers

When shopping around for a payday loan there are a number of things that you will need to take into consideration to ensure that whatever the lender is offering you, is best suited to your current financial situation. For example if you only need to borrow a small amount of money for a very specific amount of time, shop around a number of lenders until a lender can match your requirements. Remember, you should always be in the driving seat when it comes to a payday loan, if a lender can not give you your desired amount of money or borrowing periods then you are under no obligation to accept this offer.

Here are our top points to look out for:

APR and Interest Rates – Always take a note of the current APR and interest rates in offer. There are many lenders that offer a huge range of interest rates ranging from 200% all the way to over 1000%! It is vital that you try and find a lender with the lowest possible interest rates to ensure that you don’t end up paying over the odds in your repayments. Being accepted for a payday loan will feel great and you will be tempted to accept it there and then, however always look at the total amount that you will be paying back before agreeing any contract. Total amount repayable examples are visible on every lenders home page, this basically gives an example of how much you will be expected to pay back when borrowing certain amounts of money and will give you a clear indication as to whether you will be able to afford it.

Borrowing Terms and Conditions – You should always look at the implications involved when missing a payment, does this have an effect on your credit score? Will you be charged a higher interest rate? Always read the small print in the terms and conditions section of a lenders website.

Length of borrowing terms – If you only need to borrow for a specific amount of time, in order to save repaying unnecessary interest rates you should try to find a lender who can offer you the exact borrowing terms that you want. For example if you need to borrow £100 until you next payday in 2 weeks time but the lender is only offering a borrowing period of 10 days, this is not going to work for you and you may struggle to make the repayments which may have other implications.

Responsible Lending Policy – Every lender should have a responsible lending policy in place, for example here at Paydaypixie.co.uk we believe that if a payday loan is not necessarily the most suitable option for you, we will always provide you with alternative advice and guidance on other financial solutions that may be better suited to your needs. Many payday loan lenders have previously been fined by the Financial Conduct Authority for offering loans to people who simply would not be able to afford the repayments of a loan which can put the customer in further financial difficulty.

FCA Authorization Number – Every UK lender needs to be approved by the UK financial governing body the FCA. Any lender who has not been issued with a FCA authorization number is not permitted to offer any form of finance to UK customers. Helpful Tip – You can find a lenders FCA authorization number at the footer of their website, scroll down and take a look at ours! If you feel that a payday lender is operating illegally, you should contact the FCA/ Financial Ombudsman to voice your concerns.

Secure Site –  Always make sure that your personal information is protected. If you have any concerns regarding a website or something just doesn’t quite feel right, always follow your gut instinct and apply with a more well known brand. You can always check for reviews and other customer experiences online regarding any specific lender.

By following our step by step guide we hope that you find the payday loan application process a little less daunting than usual! If you have any questions regarding our application process or payday loans, please don’t hesitate to contact a member of our team by emailing us directly contactus@paydaypixie.co.uk

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