These days, we are all looking to
make our pay stretch further each month, but sadly there are often times when
there just isn't enough spare cash to cover every expense, especially if you
experience unavoidable costs like emergency dentist work or your car needs to
undergo unexpected repairs. For times such as this being able to turn to a
payday lender, or text loan company, can mean having some instant cash flow in
your pocket just when you need it. However, as with all financial products you
need to look closely and do your research before making any commitments or you
might find yourself dealing with an unlicensed lender.
The market is overflowing with
payday lenders and companies offering any number of short-term loans and in
theory these loans can be of advantage when your monthly salary just won't
stretch far enough. A payday loan works by lending you a small amount of money,
usually around £100, within a quick turnaround so you can pay your bills within
24 hours. The application process is quick and simple, you just need to confirm
that you are over 18, hold a UK based bank account and have the means to repay
the loan amount within the time frames agreed. Once approved you can request a
loan as often as you need it, either online or by text.
However, alongside the many
legitimate payday lenders you are likely to find a number of unlicensed lenders
offering what seems like similar terms to other loan agreements. Like any
product that involves a financial commitment, you need to check your chosen
payday lender is authorised and that your loan will be secure.
Unlicensed lenders operate outside
the law and set financial standards, meaning they can make their loan terms
rather ambiguous on first look and only after you have signed up may you
realise that the terms of the loan offered are very bad.
Payday loans are a great short-term
financial fix and because of this you will find a higher interest rate than on
other loans. However, borrowing from an unlicensed lender could mean you will
end up paying an even higher rate than with other payday lenders. As with any
loan you must always aim to pay back the loan amount on time, but missing a
payment with an unlicensed lender means you are likely to get harassed by your
lender and incur extortionate costs, which can be very daunting.
All of this can be avoided by doing
your research before choosing a payday lender and finding the right company for
you and your situation. Look closely at every lender you are considering and
make sure they are authorised before making any kind of financial commitment.
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