Do you find it challenging to identify who is a reliable payday loan lender? You need to think cautiously if you are reaching out for the right deal and the right lender. Otherwise, you would invite hefty interest charges.
You will come across attractive offers by payday loan providers. However, it is hard to tell who is genuine and who is not at first look. You need to be aware of the traits that make a reliable lender.
Getting 24-hour payday loans is easy, but you might land in trouble if you do not know who you are dealing with. It is crucial for you to understand the definition of a reputable lender. This way, you can differentiate between a reliable lender and a scammer.
Often, fraudsters present a loan deal in such a manner that you cannot but think of getting it only. With some patience and knowledge of the ideal traits of a reliable lender, you can avert a potential financial trap.
If you want to know three ways to recognise if you have encountered a reliable lender, this blog is a must-read for you.
Check about the payday loan lender
FCA has set up rules and regulations for payday loan lenders. You must acquaint yourself with these various conditions. They will be helpful in clearing up your confusion.
You must get clarity on the type of loan provider you must avoid. It is not that you will get a readymade list of reliable lenders. Based on it, those who are not on the list should not be trusted for loans.
Your focus should be on determining the behaviour of the loan provider. The three ways to study the lender for validation are as follows:
Verify if the lender is registered
People forget to cross-check the registration of a lender when they are in a hurry or have found a stellar deal. Such ignorance gives scammers the opportunity to trick you and steal your money.
The most significant proof of a lender being credible is their registration with FCA (Financial Conduct Authority). This regulatory body has introduced laws to safeguard the interest of borrowers like you. A loan provider is bound to obey these laws. Any inconsistency in this regard can be an indication for you.
FCA has determined the price cap on the maximum amount one should pay back. In fact, there is an ultimate limit more than which the borrower should not repay. Payday lending should fall under the regulations of the FCA.
Prices are genuine and competitive
The best way to determine this is by shopping around for the best price. Yes, you should compare the loan price that different lenders quote. The pre-approval facility is easy to avail of in this matter.
Based on your application, you can see what payday loan lenders are charging. Tally all the prices carefully to find the most competitive of all. This step enables you to get an offer according to your pocket size.
Another aspect not to miss in this price context is upfront fees. Some lenders will always try to entice borrowers like you with attractive prices. Later, they might charge you extra money in the name of processing fees. If this happens to us, they are clearly not genuine lenders.
When you work with a direct lender, they will not even charge any brokerage fees also. It is because no middleman will take part in this lending process. You will have to pay interest rates only.
No responsible lender would charge any fees outright. Only fraudsters will use this tactic to extract money from you instead of lending money to you. On the other hand, if you agree to disburse the fees, you will have to repent later.
Prevent borrowing from these lenders, or else you will lose your money. As they operate illegally, tracing them to get the money back is very difficult. For this reason, prevention would be the ideal way to avoid such problems.
Check their online and physical presence
It is not surprising if you come to know about these lenders online. Nowadays, this is the most common interface through which you can get in touch with lenders. It has its pros and cons.
When you navigate through the online platform, you get the opportunity to understand the loan product from the lender’s website. You can quickly obtain detailed information before sending out the loan application.
It also facilitates careful analysis of the lender based on reviews. You can study the feedback of previous borrowers to understand the behaviour of the lenders. Moreover, you can even spot some information about the address of the lender.
Check the authenticity of the lender’s online and offline presence by paying a visit to the address. In the case of direct lenders, you will get the loan application on the website only. Ensure the loan form does not require too much sensitive information.
Be alert if this link is re-directing you to another page. The application form will be a simple one. If you find it complicated to understand, some problem is there indeed.
Ascertain if the lender has taken special care for the safety of your information. They should practice the necessary measures to ensure the complete safety of information. Check if the lender is capable of averting any future challenges.
The bottom line
The search for a reliable lender is indeed hectic if you have decided to get bad credit loans from direct lenders. Here, you have bad credit. Qualifying with good scores is crucial. However, you can get some relaxation in the case of online lenders.
Therefore, if a lender promises to offer you loans despite poor credit and later asks for more money, they are not a genuine direct lender. It is because these loans are commonly available from private loan providers. You don’t need to spend extra money to get what is already available. You can easily find easy and handy tips on this page.
Hi everyone, I am Lukas Thomas. I am a professional writer and author with having specialisation in the UK financial sector. I have more than 13 years of experience as the financial writer and hope it will continue longer. I have done my post-graduation in Masters of Business Administration (MBA) in Finance. Currently, I am performing my responsibility as a Senior Loan Expert in Fundingpeer, which is the fastest-growing online direct lending company. My job is to prepare borrower-friendly loan deals as per the company’s guidelines. I also write research-based blogs for the company’s official website. You can read them and gain knowledge on any loan product.
