The idea of the short term loan is to provide financial help to people in urgent need of money and who cannot wait for their upcoming payday. Compared to traditional loans, they have gained more popularity as they tend to be more convenient for borrowers.
LoanPig is the online direct lender as well as a loan broker in the UK that can fulfill your need to get payday loans as soon as possible. They are certified and authorized by the Financial Conduct Authority (FCA). Visit LOANPIG.CO.UK if you are interested to know more about their facilities and loan application process including for borrowers with bad credit.
Payday short term loans in the UK
More number of people in the UK is demanding for payday short term loans. The UK lenders for payday lending only provide loans for a short time that is from six months to a maximum of a year.
To apply for the loan in the UK, instead of submitting too many official documents all you need is to provide the lender with your –
- Identification proof (passport, driver’s license, etc) to show you are an eligible resident of the UK,
- Proof that you have a stable and permanent source of income,
- Active bank account details.
Reasons why payday short term loans are expensive in the UK
In the UK, short term loan tends to be attached with higher interest rates making it more expensive compared to other traditional bank loans. The following are the factors that make this loan inexpensive.
- It provides instant money
You can instantly get cast on hand if you apply for short term loan because the application process and approval is simple and fast-tracked. This is why the lenders keep the rate of interest higher than traditional banks.
- Urgent fund transfer
You are eventually paying extra for the urgent fund transfer. As soon as the application is approved, the fund transfer is done within some hours or even minutes depending on the type of loan you choose. The faster you want to receive funds, the higher the rate of interest will be.
- 24/7 availability of online application
You can apply anytime and from anywhere when doing it online. There is always be staff at the helpdesk or you can contact the lender’s company at any given point of time. Their 24/7 availability hour is also what contributes to the loan interest rate being higher.
- No impact of bad credit
The payday lenders do not check on your credit information or history. So even if you have a bad credit or rejection history in the past, it does not affect your upcoming payday lending. However, there can be some companies that will hike up their interest rate for bad credit borrowers because they are risky ones.
No matter how high the lenders wish to increase the interest rate, they need to follow some protocols given by the state. They cannot keep their interest rate beyond the maximum rate assigned by the state. So even if it is high for payday lenders than the traditional and conventional lenders, it is still within the ethical and rational framework.