Payday Loans compared side by side

We’ve all seen the sales and promotional content payday loan providers will have about their company on the website they have. However, it’s an entirely different perspective to talk to one of the representatives that work with these lenders to offer short-term credit to their customers.

First of all, even though such companies are legally obliged to state the APR that their loans will bring, there are strong beliefs that this is an unfair and inaccurate representation of the amount of interest that you would pay. Of course, because of how short-term the loan actually is, you could find the interest charged upon repayment wouldn’t be as drastic as it provisionally appears. Because of this, many lenders are enthusiastic to remind their consumers about how they offer good value for money when compared to some of the other credit solutions that are on the market.

Next, it’s intriguing for these companies to reveal the average duration that someone has a payday loan. Even though some of us will assume that this short-term credit lasts for a month – the difference between one payday loan lender and the next – the actual length of time that a person will borrow for can be 14 days in actuality. Of course, there are advantages to paying this early: one of them being the lessened interest that you might pay, and the glowing rating that would be added to your credit report.

There is also an insight into the amount of people who come into difficulty with repaying their payday loans – and it’s far less than you think. According to the founder of Wonga, Errol Damelin, less than 10% of customers who use their service proceed to default on their loan, showing the vast majority repay with no problems. This also quashes the notion that some people can’t afford to settle such debts when due.

So: if someone is in the minority of not being able to repay, it’s also reassuring to know that most consumers will not have the problem made worse because of interest rates that roll over continually. A lot of the time, repayment plans are used to ensure that a person who has come into further difficulty will get the help and care they need to overcome their financial difficulty in an effective way. Notifications, emails and contact from Wonga are made on the information you provide, ensuring communication to get the challenges resolved is encouraged.

However, it’s always worthwhile to bear in mind that there are some collection charges levied onto person’s account if they experience delays in repayment. Looking out for these is a good idea, and according to research, the market-leading benchmark is one sum of £15 that is added if the agreed due date isn’t satisfied.

Payday loan representatives are also keen to reiterate is that they are here to help if things go wrong. With regulators and consumers happy with the services provided, lenders are determined that is a needed service in this industry.