One of the problems that the payday loan industry faced in the past was that there were rogue lenders that were an extremely bad example of how best to lend money to anyone, let alone those who were already in the low-income bracket, and likely to face further financial problems as a result of the application for a payday loan. It is important to realise that with the new breed of responsible payday loan lenders there is no longer the same worry that a person will feel under pressure to sign up to an agreement where money is borrowed that actually places them in greater danger financially and promotes a cycle of debt that they can’t get out of due to higher interest rates and missed payment fees.
The change has been a dramatic one and can be seen from the very first stages of an application for a payday loan.
When an applicant makes the decision to apply for a payday loan through a responsible payday loan service they are committing to borrowing money with an honest view to being able to pay the loan back, as well as the interest and any fees that are agreed before the loan is awarded.
We’ve seen how this caused problems in the past, and that is why a responsible lender will only accept an application if they can see that the applicant has a source of income that allows them to cover the cost of the initial payday loan sum, as well as the interest attached. They provide the applicant with as much information as possible before a loan application is put through, so there is no longer any chance of hidden fees becoming a future problem. The loan amount is clear, as is the interest related to the repayment period and the total loan sum.
As long as an applicant has a bank account and a source of income they should be able to seek a payday loan and be successful, but the change in approach has not stopped there.
What happens if the unforeseen and unexpected does happen and you lose your job after taking out a payday or instalment loan?
Whereas in the past, payday loan companies would continue to add late payment charges and greater levels of interest on to the borrowers account, making it almost impossible to see a way out of the spiralling debt, the modern payday loan company is different.
As soon as you understand there is a potential problem contact your account manager and let them know of the change in circumstance that you are facing. There are always options available to you, including payment holidays or a deferment of payment for a set period of time to allow you time to get back on your feet. With an open and honest channel of communication the new breed of payday loan lenders are certainly a refreshing change from the historic and derided payday loan companies that were seen to pick the bones of borrowers drowning in debt.