Payday Loan Charges UK
Payday Loans – What are they?
Have you ever ran out of cash and there is no hope for getting cash until the end of the month? The truth is that most people have found themselves in such a situation at one time in their lifetime. Well, if you are in such a position, you could benefit a lot from the best payday loans UK. Payday loans are a type of short-term credit that you can take to sustain your financial needs until you get the paycheck at the end of the month. Once you make a payday loan application, your payday loans lender transfers the money to your bank account immediately upon approving your loan. You should repay the loan together with interest at the end of the month. Often, the best payday loans UK involves the borrowing of small amounts of money, or when you have an emergency at hand.
Regulations on Payday Loans
The Financial Conduct Authority (FCA) has set rules and regulations that govern the cost imposed on these payday loans UK. The rules put a limit on the default fees and chargeable interest on your credit. There is an overall cap on this type of loan, meaning you can never repay a loan of an amount of money more than two times of what your lender gave you.
Before your loan approval, a payday loans lender will request you for a recurring payment. Also known as a continuous payment authority, a recurring payment gives the lender permission to take the amount of money you owe them from your bank account in case of default via your debit card. The lender deducts the cash on the day the loan is due. While this arrangement safeguards the interests of the lender, it exposes the borrower to financial risk. This situation happens when the lender recovers their cash, leaving the borrower with insufficient funds for other needs.
What happens if you are Unable to Repay the Loan?
If the payday comes and you do not have money to repay your loan, it is prudent to talk to your lender promptly. The lender can give you a rollover, or grant you another facility. However, there are limitations to how many times you can roll over a loan and will need to provide sufficient information of debt advice collectors.
Any time you are short of cash and are looking for payday loans uk, it is important first to consider your ability to repay the loans payday plus the interest required at the due time. Once you are sure on being able to repay the loan, look for a lender that is licensed and regulated by the appropriate authorities. Ensure that you also use the funds responsibly.
A payday loan is a critical facility to take care of unplanned financial emergencies when correctly used. On the other hand, misuse of the funds and failure to pay on time results to poor credit rating and thus being denied loans in future.