It has been reported that the OFT is planning to give the top 50 lending companies just 12 weeks to change their ways and prove that they are in fact lending responsibly and carrying out the proper checks to ensure their clients can actually afford to pay back the money that they are borrowing.

Government Announces Plans for New Restrictions

It has also been reported that the government plan to put in more restrictions on how lenders can advertise and market these types of loans to the public, as currently they are not happy with the messages and targeting of the advertising and marketing campaigns behind many of these fairly new lending companies.

The government will work closely with the Office of Fair Trading, Advertising Standards Agency, Committees of Advertising Practice, and industry to make sure advertising does not lure consumers into taking out payday loans that are not right for them – Jo Swinson, the Consumer Affairs Minister.

There has been a lot of talk about capping interest rates as this is one of core reasons that people fall into a debt cycle with these instant loans however after a recently published report from Bristol University came to light it seems for the time being the decision is to leave the interest rates as they are without any restriction.

A charity named StepDebt say that the average debt from a payday loan is now £1,657 which is a lot higher than the average client’s monthly income.

These lenders originally started a very lucrative business offering instant payday loans that are generally paid back within 1 month, however it is now the case that nearly half the revenue generate by these companies actually came from longer loan periods as many lenders now offer loans across 12 months or some even up to 2 years which is a long step away from the initial concept of payday loans.

The names of the companies involved in this investigation have not yet been released however we are aware of some of the reasons that they are being accused of irresponsible lending:

• Aggressive methods of debt collection
• Failing to do proper and appropriate checks to see if the client can afford the loan
• Not explaining clearly how repayments are collected

Could No Credit Check Loans Be The Downfall of Payday Lending?

It seems that what was once a gleaming benefit to payday loans – the fact that even if you had a bad credit score – could now be coming back ground to bite these lending companies as this is one of the reasons that they are now in hot water. Doing a credit check on a potential borrowers is one of the ways high street banks check to see if they can in fact afford the loan and are in a position to pay it back, it might be the case that payday lenders will soon be enforcing similar practices to ensure that any new requirements put in place are met.

Take My iPhone 4S 32GB As An Example

We felt the best way to judge which website is the best to use for selling your old phone is to provide you with an example of the payout amounts from the top 5 sites. So for the purpose of the example we will use my iPhone 4S 32GB, standard scenario of getting an iPhone 5 upgrade and wanting to sell my iPhone 4S to make a bit of extra cash. Looking at the top 5 websites we have put together a quick chart below to show the best payout rates.

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The latest topic however is turning to people without jobs and what they are supposed to do in such situations for example they find themselves in some kind of emergency that would require them to pay money in a very quick timescale they may only have one option, one of these fast payday loans for unemployed people. The problem however with this service is that unemployed people with no inclination towards actually paying back the payday loan or in fact getting a job to do so, these people then find them selves in hideous amounts of debt and it often then one way or another becomes the government’s problem to deal with which obviously is funded by us, the tax payers money.

So with all this in mind it should be pretty obvious that yes you can get a payday loan if you are unemployed however only if this is for a short period and you are actively looking for a job so you know that you will be able to pay it back in the allocated timescale. It is still quite risky doing so but at least you will know to be sensible enough to make sure you have work and an income coming in for when the bill is due.

For example, your lender could request that you put a valuable possession down as a guarantee that you’ll meet the repayments of the loan. The reason for this is that they want to protect their investment in the case that you fail to pay off the loan, or disappear without contacting them. At the end of the day, lenders are a business and they need to make profits. By asking you to put down a possession in the chance that you don’t meet the requirements of the loan, they are covering themselves of any losses they may incur. Now, of course, if you’re planning on paying back the loan in a responsible manner, you’ll never have to worry about any of this.

Another important point is that if you’re considering getting a 12 month loan with bad credit, you may find that the interest rates are higher and you’ll need to make higher repayments than you normally would. This is perfectly normal. Because you’re a bad candidate for a loan, they are further covering their investment. Because you’ve made a bad decision in the past, you’re now having to pay for it.

The key point here, is to meet the repayments and work on building back up your credit rating – so that you can take out more affordable 12 month loans.

12 month personal loans should only be taken up with reputable loan companies and this does not mean just because they advertise on local television they must be genuine. If the loan company has a website; again this does not make them a competitive loan company you should be doing business with.

The first 12 month personal loans enquiry we found online looked genuine enough and was advertised on a neatly laid out web page with access to live chat support. But the rates on offer were less than desirable. A £1000 loan over 12 months would cost you £1867 (an APR of 277%). This means that a £1000 loan will cost you an extra £867. Now that seems to be a lot of payback and in many cases if you desperately need £1000 right now which you cannot raise at the moment then how would you be able to raise the enormously high £156 monthly payments, every month for a year?

The first place to head for if you must get a 12 month loan is your own bank. It is possible as a customer they are prepared to do you a deal, and a good one at that. They know you, and they trust you (or at least you would hope they do!) so try this avenue first. A quick check with my bank revealed that 12 month personal loans usually come out at 6.1% APR and you can borrow between £7000 and £20000 (depending on your personal credit circumstances). Believe it or not there are some good deals available on 12 month personal loans for those with bad credit too. I was easily able to find headline representative APRs starting at 7.2%.

One of the advantages of 12 month personal loans has to be the fact that lenders will think if the debt is only going to last 12 months (as opposed to five or ten years), then there is a very good chance the customer will not default on the repayments.

How It Works

One of the biggest and most popular loan lenders is Wonga. They currently offer PayDay loans to UK citizens who are looking for loans immediately. Their online process will be able to give you an instant decision once completed. From there, Wonga send out payments in 15-minute intervals. Every 15 minutes, their computer system automatically processes and sends each and every payment. If you’re lucky, you may be accepted when the timer is less than a minute. This would result in the PayDay loan arriving in your bank within a mere few seconds. While this is unlikely, they still offer the fastest loan delivery in the United Kingdom. No other lender can beat their 15-minute delivery time.

The only loans which are available for delivery within an hour are PayDay loans unfortunately. These are available so quickly because the lenders don’t need to carry out manual approval. They simply check to see if you’re working, and if all your details match up with their credit checks, then they send the loan immediately. Loans can be sent within 1 hour anytime of the day – they are computer processed 24/7.

Apart from dealing with a reputable company though, you’ll want a company who can give you great rates on the loans. Some companies will try and rip you off with extremely high APR and interest rates. As such, you should always be willing to compare PayDay loans with lenders to see if the company you’re considering dealing with is competitive in the market. The top lenders like Wonga establish themselves as reputable because they deliver the loans ontime, and hide nothing about their service. If you’re on a companies website and finding it difficult to find the APR rates, or the contact details of the business, then stay clear of them.

Honest and reputable PayDay loan companies have nothing to hide. They will display their phone number and address, and will clearly display their APR rates. They will consider themselves leaders in the industry, and as such, they shouldn’t be scared to show everything about their business. If you can’t find any positive reviews about a PayDay lender, it’s best to use another one, just in case.

Regardless of what is you plan to purchase, you will find that there is a loan to suit your needs. For a lot of people it can be a struggle paying back a loan under 12 months, so there is a trend leaning towards the 24 month loan, which gives you a much longer time frame to pay back the money you borrow.

In this quick start guide we’ll discuss the in’s and out’s of the 24 month loan, so you can better understand why it is a great choice for buying larger items and what it may not be good for.

The first thing on the agenda is obviously the time frame. As stated above trying to pay back a loan which has a limited time frame such as 12 or 6 months, may not seem that difficult at first but what if you have a month where you struggle to pay your bills and of course your loan? It can be so much harder to pay it back and it’s not uncommon for some people to have to take out another loan to pay back the original one. With a 24 month loan you get a much greater length of time to pay the money back, and more often than not, the payments will be smaller and more manageable.

So, why would you want to take out a 24 month loan? One example would be to pay for a holiday abroad, which is something a lot of people, no matter how hard they work, cannot afford. Another example would be to have some remodelling done in your home, such as having a new kitchen supplied and fitted. There is the obvious aspect of the smaller re-payments which always helps with any loan.

On the subject of interest rates things get interesting. Most people assume that if they take out a loan over a longer period of time then they can expect to pay more back in interest, and depending on the lender this can sometimes be the case but for the majority of organizations which provide these types of loans the interest is usually only just slightly higher than that of the same loan over a shorter period of time.

After reading through this quick guide it is hoped that you will have a good understanding of 24 month loans and why they can be very beneficial. You have read of examples on how you might want to use the money from such a loan, but these are nothing more than ideas and you are free to do what you want with the money once you get it. You have all the benefits of a short term loan such as low interest with the obvious exception that you can pay it back over a longer period of time, taking some of the stress out of making the repayments.