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2019/20 Payday Loan Guides and News

The payday loan guides have been created to allow you to understand what is involved with a payday loan and to consider other lending options that are available. We understand that a payday loan may seem like your only choice. The articles here will help you to find affordable alternatives to payday loans or to ensure you get a good deal if a payday loan is your only option.

What is A Payday Loan?

A payday loan is designed for short period lending. Typically they are advertised as a means to fund unexpected purchases that arise a few days before the end of the month, when you are strapped for cash and waiting for payday. Unlike traditional personal loans they are arranged over days rather than years, so can be used as a stopgap until your wages arrive.

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Payday Loans: Good or Bad?

There has been much debate about Payday loans in recent years, but how are they different to a 'traditional' loan and, are they worse?

You won't have been able to turn the TV on recently without hearing about unscrupulous methods of lending so n this article we explore the Payday loan system and review the processes used. Information used in the article has been taken randomly from the Internet using current active payday lending companies examples.

All offer a short-term loan, repayable upon a persons' receipt of next salary.

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UK Debt

'Neither a lender nor a borrower be'.

Very shrewd words, but extremely difficult in the UK at the moment, which seems to be becoming more and more materialistic with each day that passes.

Not so much as 'keeping up with the Jones', more like peoples aspirations to show their success and have the latest super UHD Nano cell TV, that latest phone upgrade, the designer dress, an annual exotic holiday or absolutely gorgeous £400 handbag.

Spending on your credit card is still money and it is debt!

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A society of Debt

Nowadays most people have some form of debt, whether it's purchases on a credit card, a hire purchase agreement with a shop, or a mortgage agreement with a bank, it all adds up.

In recent years, banks, building societies and loan companies have come under much scrutiny and more than a little criticism for allowing people to take on more credit than they are able to afford.

People have lost their homes, relationships have broken down and in extreme cases some have even taken their life, due to excessive debt and the worry that comes with it.

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Debt Management

Even though new figures indicate that wages are on the increase, albeit modestly, there are still large numbers of people struggling with an historic accumulation of bad debt through Payday loan companies. As a result of pay freezes from the past few years it has left families with a poor standard of living and in some cases they have even lost their homes.

The following article looks at options when it comes to managing existing debt based on the individual's circumstances. Debt can affect anyone; it knows no boundaries and can have profound and devastating results on families and individuals.

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Alternatives to Payday Loans

Most people who resort to payday loans believe they don't have any other choice.

Instead of panic borrowing and opting for solutions with extortionately high interest rates, there are other options. Really do think long and had before you enter into any type of credit agreement as it could really harm you financially - both in terms of your credit rating, and how you manage to make it to payday next month. In this payday loan guide, we look at your alternate financial solutions and options.

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History of Payday Loans

It's wrong to assume that payday loans are a new phenomenon. After all, the industry in its current form was much smaller until fairly recently. In 2006, only 250,000 people used short-term loans, in contrast in 2012 rapid growth meant that the payday loan industry was worth around £2.2 billion.

Yet, it all started long before 2006 and to this article explains the full history of payday loans going back centuries.

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The Impact of Payday Loans

Payday loans have been identified in a new report as the "unhealthiest" form of credit, with unauthorised overdrafts coming second. In a survey more than 500 borrowers were asked about the impact that different forms of credit had on them to compile the findings.

The report, from health education charity the Royal Society for Public Health (RSPH) ranked payday loans as having the most negative impact on mental well-being, followed by unauthorised overdrafts, doorstep loans and weekly payment stores.

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The Impact of Payday Loan Caps

Payday loans have been a hot topic in the news for the past few years and mostly for wrong reasons.

Complaints towards the lenders and companies offering payday loans have risen dramatically mostly relating to the high interest charges and high default fees charged by payday lenders.

A more worrying complaint is that payday loans can easily lead to spiralling debts and trap people in poverty.

In the past year, the Financial Conduct Authority (FCA) has set many new rules to control the ever-increasing menace of payday loans.

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Payday Loan Providers

As you will have seen in the previous article payday loans are expensive and risky. Before you resort to payday loans, you should answer some of the questions listed below in order to gauge if this is the route for you.

  • Do you need cash for an unavoidable emergency?
  • Have you explored all the alternatives to payday loans?
  • Do you know that interest rates on these loans are very high?
  • Do you have a realistic plan for repayment?

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Payday Loan Brokers

While payday loans are dangerous in any form, they are much worse if taken through middlemen.

In 2014, there was a surge in complaints regarding payday loan brokers. In the first 8 months of 2014, the Financial Ombudsman Service (FOS) had received complaints from nearly 10,000 people about payday loan middlemen or credit broking websites.

This is more than double of the 4,726 complaints received for the entire 2013.

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CPA - Recurring payments for Payday loans

Many payday loan borrowers have horror stories to share about Continuous Payment Authority (CPA).

Although CPA's feel like direct debits they are not. They allow companies to take money whenever they think they're owed, so it's important to know when you can cancel and whether you can switch to direct debits. Payday lenders and other subscription websites often use recurring payments. Up until 2009, only the company could cancel them, you couldn't. You now have a right to tell your bank to cancel.

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Guide for borrowers who cannot repay their payday loans

A survey has half of people with payday loans were unable to repay their debts while a third were hassled by debt collectors in the last year. The Office of Fair Trading (OFT) also says borrowers can pay 'far more than expected through rollovers, additional interest and other charges'. In this guide we explain what happens when payday loans go wrong.

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Why do people choose Payday Loans?

Payday loans are accessible. You can find payday lenders on the high street and online too using your PC or mobile. The application only takes a few minutes and the decision is usually instant. Before you know it, the funds are in your account. Not to mention there are now about 200 payday loan lenders in the UK so there is no shortage of choice.

In some cases, people rely on payday loan because they have failed to repay their loan and so the lender offers to delay the repayment until a later date. As the interest for these extra days starts to accumulate, some borrowers find that they can't keep up with the repayment so they are forced to take out more payday loans to pay for their other outstanding loans.

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Payday Loans - present day

The previous articles have mostly concentrated on the Payday loan industry, where it evolved from, how it took hold during the financial crisis and the 2014 legislation that saw legal restrictions to charges and customer checks to see if the borrowers were capable of paying back the loan. This article is about the present day and seeing where the payday loan companies find themselves in the news. Despite the legislation and fee-capping Payday loans are still hitting the headlines for the wrong reasons.

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Payday Loans the impact on people

The following article is an example of how an individual can enter into a payday loan agreement and how quickly it can spiral out of control leaving a huge amount of money owing and people in desperate situations. Amelia Murray wrote the following article for the Daily Mail that has been used as an example in many articles since on how unscrupulous and damaging payday lending really is.

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