The advantages of online payday loans over traditional money shops
Choosing the right payday loans for your circumstances can be difficult if you are not a financial expert but opting for payday loans fast can be much better for your bank balance than going to a traditional money shop. In many cases, people strapped for cash can end up going to a pawnbrokers to pawn some of their belongings with the intention of buying them back at a later date. Chains of pawnbrokers have become commonplace on high streets throughout the UK and along with the usual buying and selling, some of them also offer to cash cheques (at a significant cost to the person cashing them) or they may even offer payday loans with high interest charges.
Traditional Payday Lenders
Traditional money shops usually use the post-dated cheque system when they provide payday loans, asking for a personal cheque so that if the person does not come in to the store on the due date to pay them back with interest, then they can simply cash in the cheque and get the money that way. If the cheque bounces for any reason then the borrower will have to deal with debt collectors and may also face charges from the bank for attempting to make payments despite having insufficient funds. It can be a great deal of trouble and the best deals are not to be found on the high street.
As with almost any other product, if you want to get a good deal, jumping online and comparing what is on offer is the best idea. Payday loans fast companies are competing for customers with most having the same eligibility criteria. In order to take out payday loans, you need to be 18 or older, have a permanent job, be a permanent UK resident and earn at least £750 a month.
Online Lenders
Unlike high street pawnbrokers and traditional money shops, online lenders have fewer overheads and face greater competition so they are likely to charge less interest. As a financial business all lenders should be regulated, so make sure you choose a legitimate lender that is subject to the rules of the FSA (Financial Services Authority) which govern all banks, building societies and other lenders in the UK.
If you opt for an online company that provides payday loans they won't ask for a cheque but they do ask for your bank details in order to transfer the money into your bank account and for your debit card details in order that they can reclaim the money and interest on the agreed date. This is far simpler than the system employed by traditional money shops but they will need to confirm your identity and will usually do so with a quick credit check. The credit check isn't to examine your credit history in detail, just to confirm that you are who you claim to be.
The reason credit checks aren't as necessary as they are with most traditional loans is the short term nature of payday loans UK. Most loans are looking for a long term commitment, and need to be comfortable that you will be able to hold to that commitment without being late on (or even missing) payments. With payday loans companies, the commitment is only until you get paid, and usually around 28 days. This means that the credit checks aren't as necessary as they are with longer term finance. Do always make sure that the loan you are applying for is right for you.
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