Ensuring You Fully Understand The Terms And Conditions Of A Pay Day Loan
Loans taken over short term periods have been available for many years
, however, as the recession continues to plight many people's lives there are many lending companies enabling people to have a short term loan to do with as they wish.
Whether this be to pay an unexpected bill or be used to take advantage of special offers on furniture or holidays for example, not many lending companies ask what you are going to use the money for. Money and financial experts warn people to be very careful as to which lending companies they use as the terms, conditions and application requirements vary hugely.
There are a number of factors which the lending company will require before agreeing to provide a payday loan, these include:
Age: Applicants must be over 18 years old.
Employment: People applying for a payday loan will need to be in regular paid employment or have proof of regular income if self-employed.
Repayments: Once approved the payday loan has to be repaid within one month, basically as soon as your salary is paid into your bank account a direct debit will repay the lending company in full, plus the agreed interest.
Bank account: Applicants must have an active bank account and a debit card.
Credit checks: Whether a credit check is carried out or not differs between lending companies; some say there are no credit checks required whilst others will automatically carry one out. If you have a poor credit rating it may be wise to look for companies who do not carry out credit checks!
What is in agreement with reputable lending companies, money and financial experts is that short term pay day loans should not be seen as way of getting yourself out of long term debt. This is not what pay day loans are about nor were they designed for that purpose.
As with any financial agreement you should explore all avenues prior to applying for a payday loan as well as being 100% certain you understand the terms, conditions and potential complications if you default on the repayments.
When looking online for a payday loan company there are a number of things you should look out for, these include:
* That the lending company abides to the Data Protection Act, meaning they safe guard your personal details and do not pass them to anyone else without your consent.
* That they have a valid license to loan money. This is vital, as it is 'loan sharks' which often do not have a legal money lending license and are perceived to be predators on the unwary and ill advised.
* That you are made fully aware of the monthly interest rate you will be charged. That the lending company has clearly laid out policies on repayments, which are written in user friendly language.
* Look for companies who clearly show a 'responsible lending' attitude.
It is inadvisable to jump in with both feet before weighing up all the pros and cons of having a pay day loan. Reputable companies will make your life easier by providing quick cash, they will also advise against simply using their services to repay any other outstanding debts you may have.
by: Richard Waterstone
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