We have seen a distinct change in the last few years when it comes to the perception of short term loans. While previously certain lenders gave payday loan companies a bad name due to their ridiculously high interest rates and unfair deals, the regulations that were put in place two years ago have meant that there is far greater pressure on lenders to loan their money responsibly. Today, you are more likely to deal with exceptionally high rates as a result of falling into your overdraft than you are with taking out a payday loan! Let’s take a look at just a few of the other benefits that have come about as a result of better regulates payday lender activity…
One of the most obviously evident successes that have come about through increased payday loan regulation is that the consumer is better protected. The level of intervention in the payday loan industry has increased consumer confidence as people now know that their voices will be heard and any problems that they encounter will be dealt with by the Financial Conduct Authority.
Better money management
Borrowers are now far less likely to suffer from unmanageable debts as APR rates are much lower and make the loan repayments easier to make. The better regulations protect people from borrowing more than they are able to payback, which creates the ideal scenario when it comes to responsible lending procedures. There is now a 0.8% cap on repayments, ensuring borrowers cannot be over-charged.
Payday loan lenders now have to complete an affordability and credit check on all applicants, which reduces the chance of those unable to payback their loan amount from getting themselves further into debt than they may be already. This helps to instil better values for both lender and borrower as lenders do not rely on payday loans and irresponsible lenders do not then prey on those who are struggling to pay for their lives.
Lenders are now required to have clear links on their page directing them to the Money Advice Service website and must also ensure that their websites clearly display a clear annual percentage rate. These two regulatory measures mean that there is now greater transparency when it comes to the lending process. Customers are able to have the peace of mind that they know exactly how much they will be paying back over a particular period of time.
It is evident that regulated payday loans can be a great way to secure some extra cash when it comes to an emergency situation with your cash flow. The short term loan regulations that have been put in place have meant that cheating payday loan companies were stopped in their tracks and have enabled reputable lenders to increase their trading transparency and have meant that their customers are now better informed about their loans. The regulations have given borrowers and lenders a far better relationship and have meant that both continue to work together better when it comes to building a relationship around payday loans.
You can receive a short term loan with the help of LoanPig. Simply choose how much you want to borrow and how long for, fill out our quick and simple application form, and we will do the rest! Apply online today.