In recent years, much attention has been paid to the phenomenon of instant payday loans, which have become widely used by those requiring a quick cash boost for everything from paying the rent and groceries to car repairs and all manner of other, often unexpected expenses. However, here at Swift Money, we have also seen some misconceptions creep in about this convenient finance option, so we thought we'd spell out the truth about payday loans.
Payday loans are provided by all manner of lenders across the UK. Here at Swift Money, for example, we offer access to 20 of them, which allows prospective borrowers to maximise their chances of acceptance while also benefitting from the best possible rate. This brings us onto the first of many mistaken beliefs that have arisen about payday loans over the last few years, that they are extremely expensive, burdening borrowers with extortionate interest rates.
This confusion is not helped by lenders advertising the Annualised Percentage Rate, or APR, of the loan, which does indeed look high at first glance - 1272% being the average interest rate charged by our own lenders over a 30-day period. But APR, as the full term suggests, is over a year, which payday loans - as a short-term form of finance - are certainly not. In truth, if you took out a £100 loan with one of our lenders, after 30 days, you would have just £124 to repay. This is a far cry from what the numerous media scare stories would imply.
Do some of the people who take out quick payday loans get into further financial difficulty? Sadly, the answer to that question is "yes", but this can be said of any loan. This is why Swift Money, in common with any other responsible credit brokers, only use reputable lenders, such as Sunny, Peachy and QuickQuid, Payday UK, while also emphasising the importance of only taking out such a loan for genuinely short-term financial needs.
Instant payday loans are not suitable for those with longer-term financial difficulties, but in this respect, the relative minority of disreputable lenders and credit brokers out there serves to tarnish the reputation of the payday loan industry as a whole. In any case, all consumer credit providers, including payday lenders, are subject to stringent regulation by the Financial Conduct Authority (FCA), which helps to ensure that any 'cowboy' operators are rapidly dealt with.
The truth is, for those that require a short-term cash injection for truly short-term financial needs, instant payday loans are as valid an option as any other type of loan - and here at Swift Money, we do everything possible to bring you the most competitive rates available on the market. .