The friendlier face of the payday loan ~ Debt Managements and Consolidation

Payday Bank, which claims to be one of the few reputable payday loan companies around, share their tips and insider knowledge on how to tread carefully and use services such as theirs responsibly:

According to Scottish Widows, 17 million of us are having more and more difficulty in making ends meet. This is why, as you recently read on Debt Management Today, more and more people are turning to payday loans.While this is good news for payday loan companies, there isn’t much advice out there for consumers. Because of those infamously high APRs, most financial advice sites tend to suggest avoiding payday loans or exercising a lot of caution.Since payday loans tend to be associated with poor credit, there are unregulated companies that prey on the lack of easily-accessible information about short term loans.Reputable short term loan companies, including Payday Bank, Wonga and Payday UK, advise customers not to borrow more than they can afford.They run basic credit checks to make sure that their customers can repay the loans, and aim to make most of their money through being the first choice for customers, rather than through rolled-over debt and penalty fees.Less reputable companies are more interested in making sure they get bank details than checking if someone can afford the loan. They push customers towards further debt, in order that they can charge high penalties. So what advice is there for consumers looking for short term loans?Payday Bank advises consumers to make sure that they apply to an established and reputable company. Here are some of the key signs to look for:Without at least some of these, you won’t know whether or not the company you are dealing with is regulated. After these, make sure you look for the following:• Do they prominently display the representative APR? While we may not feel that this is the fairest way to represent short term loans, the Office of Fair Trading states that it has to be there clearly, as well as a realistic idea of how much you will be expected to pay back over the short term of the loan. • Have they asked for your work address and contact details? Giving these details might be scary, but it’s important that they know you can repay the loan.• Most importantly, do they provide you with enough details so you can speak to a person? Look at their ‘contact us’ page. We may all hate hold music, but if they don’t offer a full UK postal address and phone number, think about how you would contact them if you encounter problems.Finally, is a short term loan right for you? While it might be cheaper than an unauthorised overdraft or credit card fees, could you get them authorised? Places like Barclays and Capital One offer high interest, basic credit cards, which may be more suitable for you. Alternatively, think about Credit Unions, which are slower, but also worth a look. Finally, how about social loan sites like Zopa – or even friends and family? Not all of these are feasible, and it’s the lack of real alternatives that’s the main issue.Most of our customers are looking for a small amount of money, usually less than £300, which they repay on time. If you do not believe that you can pay back a payday loan within a month of applying for it, then it probably isn’t the right solution for you.About PaydayBank: www.paydaybank.co.uk was established in 2005, and is one of the UK’s leading providers of short term financial solutions.
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