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What do people on Twitter think of payday loans?

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Social media has become the tool for so many voices to be heard and Twitter has evolved into the catalyst in which to utilise that tool. This also creates an opportunity for anyone to jump onto the bandwagon of any easy target the media wishes to attack or scrutinise. There is little doubt that payday and short term loans has been a subject to fall into this category.

2

Are lenders sticking to regulations?

As in any industry there are rogue parasites who will seize any opportunity to grab money without any thought for anything or anybody else.

Payday lenders are highly regulated by the the Financial Conduct Authority (FCA), just like the rest of the financial industry. Lenders have to adhere to all the rules that the regulator chooses to brandish and consumer credit providers are no exception. They too have to abide by these regulations.

Chief executive Gillian Guy from Citizens Advice claims that lenders are not acting fairly. She believes they are improving but said: “Customers need to have the full facts at their fingertips when making decisions about borrowing.”

The charity says that lenders are not asking enough questions to their customers so are not able to perform proper affordability checks. They also believe that lenders are not transparent enough with their charges.

However, any bonafide consumer credit provider will make the consumer aware of the total amount to be repaid and the time scale involved. If the company providing the loan matching displays no fees for their service and they are regulated by the FCA, then there it should be just that.

But applicants must also put the correct facts down and answer the questions truthfully because they are also entering into the contract of a loan. It’s a two sided coin.

3

Does taking out a payday loan equate to extra debt?

Tweets are made repeatedly that short term loans force people into more and more debt. However any reputable site should make it completely clear that this type of loan is only to be borrowed for the short term.

PaydayLoan123’s home page states clearly that ‘a short term loan is not a long term financial solution’. We also show a number of links there to help borrowers who are experiencing serious financial debt.

The majority of the millions of payday loans that were taken out over the years within the UK were paid back quickly without any problems whatsoever and most applicants were very satisfied with the service they received. Lenders are companies who are in business just like any other trying to make money whilst offering a service. They aren’t thugs!

6

Do short term loans trap families into a cycle of debt?

Not wishing to repeat what I said previously, but payday lenders are as predatory as banks and any other financial institution that wishes to lend money at a profitable return. If banks offered these types of personal loans, they would do so with minimum risk and exposure to themselves.

But most applicants choosing a short term loan do so for ease and simplicity. Or maybe their decision will be based upon the unlikeliness of them receiving a loan from the bank.

Therefore payday lenders are taking on riskier clientele. And as in all aspects of life, the higher the risk the more the gain. But payday loans can compare favourably to other types of loans if used correctly.

About the author

Peter Davis Peter Davis is a Marketing Analyst at PaydayLoan123 specialising in financial products. Peter writes most of our articles as he stays up to date with the latest information. He enjoys most sports, particularly playing football and watching his favourite football team. Peter really like his food too as we have all witnessed first hand!

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