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Payday Loan Guides

The payday loan guides are provided to allow you to understand what is involved with a payday loan and to consider your other lending options. We understand that a payday loan may seem like your only choice. The articles here will help you to find affordable alternatives to payday loans or to ensure you get a good deal if a payday loan is your only option.

Payday Loans: Path of Knowledge

1) What is A Payday Loan?

A payday loan is an amount of money borrowed, short term, usually as a 'stop-gap' until a person receives their pay/wages, hence the name.
They are also known as a cash advance, payroll loan, short term loan and several other names.
They are designed to last a very short time, from 1 day to around 6 months, unlike more traditional loans that span years, rather than days and months.

Read the article: What is A Payday Loan?

2) Payday Loans: Good or Bad?

There has been much debate about Payday loans in recent years, but how are they different to a 'traditional' loan and, are they worse?
In this article, we explore the Payday loan system and review the processes used. Companies, specialising in Payday loans were selected at random from the internet, to draw information from.
All offer a short-term loan, repayable upon a persons' receipt of next salary.

Read the article: Payday Loans: Good or Bad?

3) UK Debt

'Neither a lender nor a borrower be'.
Very shrewd words, but extremely difficult in the UK at the moment, which seems to be becoming more and more materialistic with each day that passes.
Not so much as 'keeping up with the Jones', more like peoples aspirations to show their success and have 'this new 3D interactive curve screen TV, that electronic gadget, the designer dress, an annual exotic holiday or absolutely gorgeous £400 handbag.
Spending on your credit card is still money and it is debt!

Read the article: UK Debt

4) A society of Debt

Many people nowadays have some form of debt, whether it's purchases on a credit card, a hire purchase agreement with a shop, or a mortgage agreement with a bank, it all adds up.
In recent years, banks, building societies and loan companies have come under much scrutiny and more than a little criticism for allowing people to take on more credit than they are able to afford.
People have lost their homes, relationships have broken down and in extreme cases some have even taken their life, due to excessive debt and the worry that comes with it.

Read the article: A society of Debt

5) Debt Management

During the past few years, there have been tight monetary restrictions imposed by the government in an effort to stabilise the British economy.
Early indications suggest that the UK is on its way to recovery and on 12th November 2014, press releases stated that there was a small increase in wages for the first time since 2010.
That's great news for the general public, but sadly, there are individuals within the population that are still struggling, as an accumulation of three or four years of pay freezes have seen many families drop their standard of living and in some cases even lose their homes.

Read the article: Debt Management

6) Alternatives to Payday Loans

Most people who resort to payday loans believe they don't have any other choice.
However, given the high cost and risk involved with payday loans, it is always good to consider all possible alternatives.
In this payday loan guide, we look at your alternate financial solutions and options.
Credit Unions, Community Development Finance Institutions (CDFIs), Loans and grants from local councils are a few of the many options that we introduce and explore.
Do not feel like a payday loan is your only option.

Read the article: Alternatives to Payday Loans

7) History of Payday Loans

Did you know that Payday loans have been in existence for many centuries?
With the passage of time, payday loans have undergone major transformations.
Let's look at the history of payday loans, right from the late 19th century until 2014 and see how a useful personal cashflow has been manipulated into a loan shark style mass-production operation that is poorly regulated by the UK Government and the FSA.

Read the article: History of Payday Loans

8) The Impact of Payday Loans

Payday loans have earned the reputation of being dangerous and risky. And it's not without a reason.
If not managed well, payday loans can have a serious impact on the borrowers' finances and even on their health.
To highlight the dangers of payday loans, let's look at the case of Ian Jordan, who ended his life in July 2014 because of spiralling payday loan debts.
Ian, a 60-year old man, accumulated payday loans worth £20,000 from more than 12 firms in the space of one year.

Read the article: The Impact of Payday Loans

9) The Impact of Payday Loan Caps

In the past few years, payday loans have been a lot in the news - mostly for wrong reasons.
There has been a rise in complaints related to the high interest charges and high default fees charged by payday lenders.
Another valid complaint is that payday loans lead to spiralling debts and trap people in poverty.
In the past year, the Financial Conduct Authority (FCA) has set many new rules to control the ever-increasing menace of payday loans.

Read the article: The Impact of Payday Loan Caps

10) Payday Loan Providers

Payday loans are expensive and risky. Before you resort to payday loans, you should answer some of the questions listed below:
1 - Do you need cash for an unavoidable emergency?
2 - Have you explored all the alternatives to payday loans?
3 - Do you know that interest rates on these loans are very high?
4 - Do you have a realistic plan for repayment?

Read the article: Payday Loan Providers

11) Beware or Payday Loan Brokers

While payday loans are dangerous in any form, they are much worse if taken through middlemen.
In 2014, there has been a surge in complaints regarding payday loan brokers.
In the first 8 months of 2014, the Financial Ombudsman Service (FOS) had received complaints from nearly 10,000 people about payday loan middlemen or credit broking websites.
This is more than double of the 4,726 complaints received for the entire 2013.

Read the article: Beware or Payday Loan Brokers

12) Recap: What are Payday Loans

Have you ever fell short of cash in the days approaching your payday? Well, most of us have experienced this financial pinch at some point of our lives.
How did you deal with the cash crunch?
Most people prefer to not step out of their homes and keep their expenses to the minimum until salary day. And if there is a need for real cash, people are likely to use credit cards or borrow from friends and families.
Apart from these options, a common choice of short-term credit is payday loans.

Read the article: Recap: What are Payday Loans

13) CPA - Recurring payments for Payday loans

Many payday loan borrowers have horror stories to share about Continuous Payment Authority (CPA).
CPA is very similar to direct debit, which is used for payments such as electricity or gas expenses. Under direct debit, you authorize your service providers to deduct their monthly fees directly from your bank account.
For payday loans or other financial services, CPA authorizes a lender or a broker to withdraw money from your credit or debit card without taking your permission before each withdrawal.
In this Payday Loan Guide, we look at CPA in detail.

Read the article: CPA - Recurring payments for Payday loans

14) Guide for borrowers who cannot repay their payday loans

In the UK, hundreds of people are struggling with spiralling payday loan debts.
People take one payday loan after another to pay off their previous loans. Before they realize, they end up owing much more than their repayment capacity.
All is not lost. Payday loan borrowers have a few options for debt management, if their debts have increased beyond their limits.
Let's look at some of these options in detail.

Read the article: Guide for borrowers who cannot repay their payday loans

15) Why do people choose Payday Loans?

According to research conducted by the Competition Commission in the UK, nearly 60% of payday loan customers take payday loans in spite of having access to other alternatives.
These findings are quite different from the general perception which says that payday loans are accessed only by those who are rejected by mainstream lenders.
In this article, we look at the reasons why people take payday loans.

Read the article: Why do people choose Payday Loans?

16) BBC Documentary - Young, British and Broke The Truth About Payday Loans

In 2013, the BBC produced a documentary named 'Young, British, and Broke: The Truth About Payday Loans.'
The documentary featured former TV presenter Miquita Oliver, who had her own share of financial troubles in 2012 when she was declared bankrupt.
In this payday loan guide we look at that documentary and how paydays loans have changed in the past year

Read the article: BBC Documentary - Young, British and Broke The Truth About Payday Loans

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