In any industry, there are good, bad, terrible and entirely average businesses. Deciding which description best fits each company isn’t always as straightforward as we might hope. However, when it comes to payday loans, there are a number of factors that you need to consider in order to split the great from the not so good. This article will seek to show you what to look out for the ensure you’re borrowing from a reputable company.

Ethics

Many people would happily assume that no payday loan company has ethics. The pre/misconception is based on the fact that short-term lending is generally higher risk for the customer and lender. This manifests itself in higher representative APR rates of interest as well as major penalties for failing to repay, all of which is offset by the greater availability for borrowers of all financial backgrounds.

A good company though won’t hide the negative side of lending. Whilst nobody will celebrate the risks, the payday loan provider does have a responsibility to inform borrowers of what they are accepting and generally providing as much information as possible. If they have nothing to hide, then they are more likely to be ethical in their other practices.

No charges bolted on

One thing that you really need to be wary of is payday loan companies who charge a fee just for reviewing your application. More likely than not they will claim to be an influential broker who will put you in touch with specialist lenders who can help. This is nonsense. A broker should offer a service that is entirely free (with the exception of any small money transfer fees), with any money coming from the lender as commission.

As alluded to, some companies will charge a standard fee for a quick bank transfer. This should only ever be a few pounds and they should inform you of any such cost before you commit to borrowing.

Swift service

If you’re looking for a payday loan, there’s a good chance that you don’t want to be left waiting for the money to arrive. The short-term loan industry is built on speed. With a maximum borrowing period of just over 4 weeks, customers don’t want to hang around for days. A good lender will always aim to deliver as swiftly as possible.

This speed should also be visible in other parts of the process, including the wait for a decision. Again, you don’t want to be left on tenterhooks for a prolonged period. As a result most companies will seek to provide an almost instant response, even if this is only provisional.

Competitive rates

Regardless of whether you’re borrowing thousands as part of a long-term agreement or just trying to get a few hundred to tide you over, it’s still important that you don’t end up paying over the odds when it comes to interest and charges. A good company will always be competitive and should offer rates that are amongst the best available.

When it comes to payday loans it’s not always as simple as comparing representative APR. This can be hugely misleading, as the annual rate doesn’t always accurately portray what you will actually pay in just a few weeks. So you have to compare companies based on your situation and see who comes out on top. Sometimes it might be a lender who charges on a daily basis, other times it will be those who have a standard interest rate.

So when you come to apply for a payday loan, make sure you choose a good company to borrow from by following the information provided above.

Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends Paydaypower.co.uk

Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends http://Paydaypower.co.uk

Author Bio: Vincent Rogers is a finance writer who writes for a number of finance businesses. For payday loans, he recommends Paydaypower.co.uk

Category: Finances
Keywords: payday loans, same day loans, loans, UK, finacne