Payday Loans: Important Things you Should Know

Sometimes, you may fall short on cash and need money immediately. Fortunately, payday loans are available to lend a helping hand. But because payday loans usually come with a high interest rate. This is makes it essential to compare offers and choose the one that works for your situation. Online comparison has made it less confusing and trouble-free to assess your payday loan.

Understanding your Loan

A payday loan is a short-term, unsecured loan that gives you a small amount of money at a certain interest rate. Lenders of payday loans will approve your application, depending on factors like your employment, age, residency and creditworthiness. But, they mainly focus on your ability to repay the loan. Learn more about this loan at heartloans.co.uk.

Comparing Payday Loans

When applying for a payday loan, you will want to compare factors to choose the right loan option for you: These include:

  • Interest rates. Just like other loans, it’s paramount to compare interest rates for payday loans. This helps you determine the rate that you will be paying along with the principal amount.
  • Loan term. Aside from interest rates, you also need to compare the type of term the lender providers. Short-term loans are used to be a month-loan. But, lenders these days have also introduced longer-term loans with six-month duration.

  • Lender credibility. You will want to know a lender is licensed and certified. Check the company’s rating on the FCA Consumer Credit Register. Licensed lending companies in the UK are registered under this agency. You don’t want to get a payday loan from an uncertified lender as you will be providing your personal information to them. Avoid the possibility of getting your identity stolen or your personal information being sold to other parties.

Kinds of Payday Loans

Payday loans are designed to help borrowers get small loans. But, there are many types of payday loans borrowers can choose from.

  • Online payday loan. This is the most common kind which lets you fill an online application. In this kind of loan, you are allowed to borrow money for two weeks and repay the loan plus principal.
  • No-fax payday loan. In this payday loan, lenders use phone calls to deal with borrowers and ask information and record it online.

  • One-hour payday loan. This type of loan lends money to applicants within just one hour of applying.
  • Low-fee loan. This loan is designed for borrowers can’t pay the high fees and rates that come with traditional payday loans.
News Reporter