There are many payday lenders. Not all are equal. When you are selecting a lender from a long list, it is important to know that you are dealing with good payday loan companies and get the best deal available.
There are many ways to check a lender. It is important to do your research before borrowing money. That way, you can be sure that you are choosing a lender that cares about its customers.
Why good payday loan companies are important
You might think all payday lenders are similar, but sorting the good from the bad can protect you.
Lenders are subject to regulations that dictate maximum charges and fees. Customer service experiences may vary.
Regulated lenders must act responsibly. By choosing a good payday lender that is fully regulated, you can be sure that you will not be overcharged.
Good payday loan companies will undertake extensive affordability assessments for each applicant. They do this to make sure you can afford to keep up your monthly repayments.
If you struggle to repay your loan, a good lender will work with you to find a reasonable solution.
Finding good payday loan companies is a way to protect your own interests. You should feel you are looked after for the duration of your loan term.
Not all lenders will fit the definition of a good payday loan company. Unfortunately, there are some that are not FCA regulated. Anyone can pose as a lender online. Confusingly creating a convincing website. It is important to check before providing personal details.
Remember some scammers will use another company’s name. They could even create a website that looks like a genuine company. By doing your research, you can ensure you do not fall victim to an online payday loan scam.
The Financial Services Register
The Financial Conduct Authority regulates the short term loan industry.
Regulated lenders must adhere to specific rules, including price caps.
Loan providers approved by the FCA will be listed on the Financial Services Register. This is one of the first places to look if you want to check a lender is operating lawfully.
When you view the Financial Services Register, check the domain or web address. It should match the one that you are applying from. For example, QuickQuid.com is not the same as Quick-Quid.com. Look out for minor differences.
By reading customer reviews, you can access the thoughts of genuine payday loan customers. These are vital for first-hand views that do not come from a marketing perspective.
Any lender can tell you what they do. Yet some of the most useful details come from other customers.
These reviews can tell you what short term lenders are really like to deal with. Do they offer good customer service? How do they respond if you are struggling to pay what you owe?
If a payday lender has received an FCA fine, or if public opinion is negative, you can be sure the media will have picked up on it.
Bad press sticks around. So it can help to look online for any news reports relating to a lender.
Remember new FCA regulations were introduced in early 2015. They changed the rules for lenders.
Many lenders changed their behaviour to fit within the new regulations. Some lenders had to pay compensation for previous lending behaviour. These lenders include Wonga and QuickQuid.
If you find negative reports online, keep in mind things may have changed since they were published. People may be writing reviews based on experiences that were not recent.
Any FCA regulated lender will have the same price caps in place. These caps ensure you are not charged unreasonable amounts for late payments. The amount you repay can never be more than double what you originally borrowed.
Good payday loan companies
Lender WageDayAdvance have not received any FCA fines.
Following the new regulations, WageDayAdvance implemented several initiatives to provide reassurance to their customers. This included investment in a new senior management team.
Although WageDay Advance have recently published company losses, they were not required to make compensation payments.
Today, independent Feefo reviews give WageDayAdvance a score of 4.9/5 (correct as of November 2016).
Positive reviews mention an efficient service.
They also comment on a smooth process, with repayments taken as expected.
Satsuma is another payday lender that has not been required to pay compensation.
This lender offers short term loans that you can pay back in manageable weekly instalments. Usually, lenders ask for repayments to be made monthly.
Independent Satsuma Loans reviews give a score of 4.8/5 (as of November 2016).
Borrowers have said speaking to customer service staff on the phone is a pleasant experience. Reviews state funds often reach bank accounts within an hour.
Pixie’s slogan is ‘a little magic when you need it’.
This lender may not be as well-known as some others, but offers a fully regulated service. Pixie is approved by the Financial Conduct Authority.
Pixie is also a member of the Consumer Credit Trade Association. Membership is optional, but provides further peace of mind for borrowers. Lenders must pay a subscription fee. This fee offers further reassurance that they are committed to providing fair service.
On TrustPilot, Ferratum has a score of 9.4/10 (as of November 2016).
Ferratum is one of the only lenders to allow customers to apply for text loans. For security, this service is only available to people that have borrowed from them before.
Ferratum is a member of the Consumer Credit Trade Association.
SafetyNet Credit has received a score of 9.3/10 on TrustPilot.
Borrowers admit borrowing from SafetyNet can be daunting at first. After all, this lender asks for access to your bank account.
It is sensible to be cautious, protecting your online security. Yet, this access is read-only and is requested for the benefit of consumers.
SafetyNet Credit is a fully authorised and regulated lender. Their loans operate in a slightly different way to traditional loans.
With SafetyNet, you receive a credit limit when you send your application. You can choose to borrow all this money, or to borrow a smaller amount. You can repay and borrow as often as you like, within your credit limit, for as long as your account is open.
By requesting read-only bank account access, SafetyNet Credit can ensure you can afford to make repayments. They can confirm your income and expenditure claims.
They will notice if you are struggling financially. This means any problems with repayment are quickly picked up and dealt with.
Besides all the above, SafetyNet will only take repayments if you have the money available and not ringfenced for bills. You will not need to worry about loan repayments pushing you into an unauthorised overdraft. Or those leaving you without any spare cash for essentials.
In reviews, customers say that SafetyNet Credit offers excellent customer service. Many customers appreciate the extra effort put into the lending decision.
With access to your bank statement, this lender does not need to rely as much on the details within your credit file.
Finding good payday lenders through a broker
If you are applying for a loan through a comparison site or broker, then you may have some concerns. You will receive offers from a broad spectrum of lenders. How can you be sure the lenders are good ones?
It may help you to know brokers must be regulated by the Financial Conduct Authority. They are subject to the same checks and restrictions as any direct short term lender.
You can find payday loan brokers on the Financial Services Register.
Brokers must be responsible and fair. They should only work with approved and regulated lenders.
All lenders within the Cash Lady portfolio are good payday loan companies. These are providers that act fairly, treat their customers well and are regulated by the FCA.
Some lenders, like Wonga and Peachy, have received bad press in the past. They have paid compensation to customers and have tightened their lending restrictions. Now, these lenders operate under the same regulations as the ones that have been featured above.
For further peace of mind, your application through Cash Lady is not a final decision. You will receive offers of approval in principle, but will need to complete your application through the lender’s own system.
You will have time to check reviews. Plus you can view the Financial Services Register and learn more about a lender, before committing to a loan.
You are under no obligation to complete an application, having used the Cash Lady website.
Read the article “What is the difference between a broker and a lender?” which may help you to choose who is to deal with.