Like all loan transactions available in the market, payday loans UK comprise the purchase of money today in exchange for a promise to pay money in future negotiated date. It is a multibillion-dollar industry that is mostly used by low-income families. To qualify for a payday loan, it is somewhat standard for lenders such as Dosh Express, to require you an identification card, a bank statement, and a pay stub. The normal process if for you to leave them a post-dated check and they would in turn give you the cash. They usually give a 14 day allowance for you to pay off this loan.
These services are also termed successful banking for the poor. Take for example a small $300 dollar loaned for a short period around two weeks to low-income individuals who has checking accounts, direct payroll deposits and a stable job. So if one of these individuals decided to take a loan from payday lenders, he should write a post-dated check for $300 to the lender and gets $255 in cash. The lender holds on the cash for 14 days cash it, netting $45 on the transaction. The Consumer Credit Act 1974 requires providers of payday loans UKto get a license from the Office of Fair Trading before they can operate. Although the OFT is required by law to investigate irresponsible lending it its evaluation, they, however, has no power to restrict the interest rates of these loans.
According to a new study, there are approximately a million people in the UK that has admitted to using this scheme. Mostly, it was used to bridge the gap between the next paycheck and the outstanding household bills. Although all of them know how the interests are, they still seek the help of lenders due to the urgencies of their needs. Experts on personal finance have even discouraged the use of payday loans as it may become habitual for the users, and in the long run, would badly hurt their spending capacity because of the interest rates. However, as the number of users creep up, they number of reasons for using this service also goes up. One of which is the approval difficulties for bank overdrafts, credit cards and personal loans. In effect, payday loans are the third most popular ways to borrow money in the United Kingdom. As the cost of living is continually going up, people resorted mostly to extending their borrowing capacity rather adjusting their lifestyle.
Payday Loans UK Comprise the Purchase of Money Today