The payday loan industry is rapidly increasing and one reason for this expansion is the increase in payday loans online.
The amount of payday loans taken out has increased in the United Kingdom significantly over the past few years. Interest rates are not restricted although a lender must disclose this amount in terms of the annual percentage rate. Revenue in this industry has gone up as a result of this increase and many companies have chosen to move to this field.
If you are looking to obtain a payday loan in this manner, you will need to know the rules and regulations concerning these funds.
One reason many prefer to take out payday loans online is that this is an easy way to get cash when you need it most. When you are having financial difficulties you may not be thinking clearly. Your top concern will be to get the cash you need to resolve the problem. Lenders may take advantage of this, especially those who are unscrupulous. One company offers an APR of 1355% when compounding is factored in. Another has an APR of 2,225%. Sadly many consumers do not take this into account during a crisis. Make sure you know exactly what the APR is on the loan you are obtaining so you don’t have any surprises in the future.
Researching payday loans online
Thanks to the Consumer Credit Act of 1974, anyone lending money must obtain a license if they wish to provide consumers with credit. This includes lenders who offer payday loans online. This act has been taken even further though. The Consumer Credit Act 2006 now requires that the Office of Fair Trading, the regulatory body in charge of issuing these licenses, must look into whether the lender is responsible in his dispersing of funds. If not, a license may be denied. No restrictions have been put into place concerning the rolling over of payday loans though. Here is where many feel that payday loans online with no credit check are so detrimental. If you keep rolling your loans over, you may end up in a vicious cycle that you cannot break. Make sure any lender you are thinking about using has a license and follows the rules and regulations. This will protect your finances from further damage.