The British press have a reputation as being one of the more ruthless newspaper organisations in the world. The recent phone hacking scandal only highlighted the lengths they will go to in order to secure a scoop.

The recent swirl of publicity regarding payday loan websites and their use of pages to target specific parts of the socio-economic climate, particularly students, marks a slow week for the guys in the press room – without their handy celeb voicemails to fall back on should they be short of a story or two. The almost semi-sarcastic story, considering the presses misdemeanors over the past 12 months, of feigned outrage actually made me chuckle into my cornflakes. Is this really that bad? The whole point of these pages were to pick up those typing into Google ‘student payday loans‘ so they were already looking in this direction anyway. Or maybe I’ve missed the point.

What is the point?

Well it would appear that this group are a defenseless and exploitable part of society that are particularly vulnerable from payday loan websites that they go looking for. Of course everyone should be dismayed at such underhand tactics, however, what is being missed is the fact that these students have to actually type in student payday loans to be returned that page. Very clever of the payday loan websites.

A storm in a tea cup is how I would sum it up, but typical of the hypocritical press that will pounce on anything they can for a story. This is how newspapers here work and is by no means a new thing. You just have to look at the stories they run of celebrities and their lifestyles when half of the British media carry on the same way.

So should students take out payday loans?

Uh no… More’s to the point should anyone take out payday loans? This is again debatable, however, it is only in the minority of cases that they will be the best solution. The simple fact about students is however that they should not be approved by payday lenders unless they have a income over a certain amount. If certain lenders are approving customers without this then that is another question and one that should be investigated by regulators.

To obtain a payday loan with this website for example the applicant must be in employment, preferably full-time, and the figure they receive will reflect how much (if they are approved) they will be approved for.

The cash advance industry is a fairly recent import from the United States that has exploded in the United Kingdom. Every year at least 1.2 million Brits are taking advantage of this type of finance in order to get by. Approximately 2.1 billion pounds is borrowed in payday loans in the United Kingdom every year. In 2009 however there were over 4 million pounds borrowed by 2.1 million people.

Most of these borrowers are under 35 years old and make less than £25,000 per year. There is also a trend for multiple loans being taken out by the same consumer. Repeat use of the payday loans is one of the major criticisms of this type of loan.

The payday loan industry was just getting started in the United Kingdom in 2006, but by 2009 it made about £242 million profit. Since then growth has continued at an exponential rate attracting more and more lenders from Europe as well as the States. These loans do not come cheap but there are so many reasons why residents of Great Britain have a need for these types of loans. The ongoing economic sluggishness has certainly contributed to it, as has unemployment, low wages, even lower wage increases and higher expenses all playing a role.

Many UK economists are concerned that in an environment where property values are low, the job market remains depressed and inflation threatens with an increased cost of living, more and more people are turning to payday loans to get by.

The online payday loan industry in the United Kingdom is able to step into the void left by the major banks as they become increasingly more conservative in their loaning practices. It is easy to get an online cash loan and for many Brits struggling to make ends meet these days it is an extremely easy process, and this is perhaps a flaw in that credit is so easily given – yet some may fail to repay as agreed. The industry is aggressive in its advertising to the working classes through tv ads and strong internet advertising.

British citizens use payday loans online for just about any reason you can think of. More than a third of all payday advances are used to pay bills. At the same time 27% of all payday borrowers use the loan for emergency situations such as car repair (the most common), death in the family, boiler repair or illness. 20% of payday loans are used for special occasion purchases such as birthday parties and baby showers that are help right before you get paid. Finally 17% of payday loans are used for ‘just needed cash’ like buying fuel.

There are not many restrictions or regulations on this type of loan in the United Kingdom. In the United States where this industry has operated longer regulation has grown up around the number of loans a consumer can have at one time and how many times a loan can be “rolled over” or extended. Members of Parliament have debated the need for regulation in the UK and as might be expected they cannot agree. Some of the reasons that more regulation is opposed are:

• Historically the payday loan has been a last recourse for people in a tough economy like the current one. When traditional lending sources dry up there needs to be an alternative for the working class to obtain needed funds.
• Valid option for young people with no history and no current credit rating. Again in these economic times there is a need for young people to have a place to turn. They can also use this to build up a positive credit rating.
• The law of unintended consequences is also cited by Parliament as a reason to hold off on regulation. More time and study is needed to see if regulation might do more harm than good with unintended consequences.

So in closing it seems that the payday loan in here to stay. It has quickly become an established and accepted instrument in the tool bag of the finance industry. The reputable lenders in this industry will be licensed and members of the CFA (Consumer Finance Association). The CFA is determined to educate the public on the use and repayment of payday loans in a responsible manner.

Guest post by Joni Warner

While it is possible to live a life free of debt, most people will find the lure of low-interest credit cards and loans too much to turn down at some point or another. Often when you sign up for a new bank account, you will be offered a credit card with the account. With low interest rates and a relatively small amount of credit available on these cards, they can often seem a good idea to keep for emergencies. Similarly, a loan from your bank with low monthly repayment amounts that will allow you to afford a large purchase that you otherwise wouldn’t can seem an attractive proposition.

However, if your circumstances change, making you unable to meet repayments, or you mis-judge the amount you have spent on your credit cards you could quickly find yourself in what seems like an inescapable debt cycle. It is also worth bearing in mind that aside from rent, tax and living expenses, things like mobile phone bills and unexpected utility bills can add to the amount you are expected to pay out monthly, leaving you struggling to make ends meet.

Quick fix payday loans

Short term payday loans can often seem like a quick fix to get you out of  a spiralling debt trap, offering low amounts of instant cash to meet your repayments in the short term, and often offering what seems like a low fee to borrow the money (roughly £25 per £100 borrowed). But these loans also need to be paid off, and you are just adding to the debts you already have. If you could not afford to pay off the original repayments, you are unlikely going to be able to pay them off again the next month, especially with the cost of the loan thrown in. Once in this circumstance it is best to stop borrowing and draw up a debt-management plan to get yourself out of trouble.

Draw up a plan

Firstly, work out everything you owe. This will include rent and utilities, as well as your phone, internet and any loans and credit cards. Work out the exact cost of each repayment monthly, as well as the total amount owed in order to be sure of what exactly you need to be paying out.

Put your debts in order of importance. Food, shelter and taxes are the most important, so make sure you have added your rent and council tax into this, after these everything else can be ranked in order of which are the most urgent. Credit cards, any loans and gas and electricity bills are important, and will need to be paid, but are not as essential as basic living expenses so make sure these fall somewhere lower down on your list.

Following this, work out a budget which includes your most basic living expenses. This is food, travel, clothing and health essentials. Anything left over from this is your expendable cash and should be worked into a series of repayments for your creditors. Most companies will not penalise you as long as they know what is going on so contact all of your creditors to explain your situation and work out a plan with them. Only offer as much as you can afford so that you are able to stick to the plan you work out with each company, and you should be able to create a workable repayment plan for everyone.

Often it is a good idea to talk to your bank and see if you can get a large low-interest loan to consolidate your debts into one monthly payment, which will often work out much lower than what you have been paying, and also prevent you having to call around various companies if there is a further problem with your finances.

Finally, if you need some more tailored advice, there are a number of free institutions in the UK which can help you to get back on track. The Citizen’s Advice Bureau has various centers set up throughout the UK and will give you free and confidential advice. You might also want to try the Debt Advice Foundation (0800 043 40 50) or the National Debtline (0808 808 4000), which are again free services designed to give you advice specifically for your situation, helping you to solve your debt problems once and for all.

As popular as payday loans are among those in the United Kingdom, there are many misconceptions about the product. These misconceptions often keep some consumers from trying out a payday loan when they might be the real solution to a short term need for cash. In this post we will try to clear up many of those misconceptions.

1. Payday lenders are not regulated:  Reputable UK payday loan companies are licensed and adhere to a code of ethics in lending. They adhere to the Office of Fair Trade guidelines and usually are members of the Consumer Finance Association. If you are working with a lender who is not licensed or showing the GFA logo, then you should find another same day loan company.
2. Interest rates are extremely high and in effect are equal to usury: This misconception is based on the high APR that they are legally required to display. The problem with this is that the APR (Annual Percentage Rate)is not designed for short term loans like a PDL. The APR is a rate that is charged for credit borrowed over a year’s time. So when you see cash advance loans with APRs of 125% for instance on a pay day cash loan, you would only pay this amount if you took a year to pay back the loan. Because of this the APR is not relevant to a pay day loan. Most pay day loans carry a finance charge of between 25 and 50 pounds per 100 pounds borrowed.
3. All payday loans charge the same high rates: If you do your homework you will find that the payday loan industry is not as collegial as they may appear at first glance. Payday lenders charge a wide variety of finance charges that can vary from 25 pounds per 100 pounds borrowed up to 250 pounds per 100 pounds. The most reputable lenders will charge between 25-50 pounds per hundred pounds borrowed. So search the web and get the best deal – not the first one you see.

I hope this helps to clear up many of the misconceptions surrounding payday loans. These loans are an excellent tool for a quick infusion of cash. Don’t be afraid to use them.

So you are thinking about getting a payday loan but you don’t have a computer and you really don’t want to do it by phone? How about getting one by texting? Sound crazy? Well this is the technology that everyone is using these days. You text your friends.  You text your family.  You pay bills by text. Now you can even use your smart phone to pay for your groceries.

So of course the payday loan industry being as competitive as it is would be first in line to offer loans by text as well. Think about it. Just send a text and get your financial needs met.  The process for getting a payday loan is getting faster and easier every day.

All you have to do to get that extra cash till pay day is text your personal information, income information and bank account information to the pay day loan firm. They will do the rest.  The only real caution is to do your research so you know the pay day loan company well. Know for certain that this is a real company and not a scam.  Find out how long the company has been in business and see if there have been any complaints filed against it.

It they have been in business for several years and have no major complaints then text away! After you have applied you will just need to wait for the texted approval to come back to you. Once you receive that message you will know that within 24 hours your loan will be deposited in your bank account.

Remember use pay day loans with care. They are a great resource if you can pay them back within the one pay day or two pay term you agree on. If you roll them over beyond that they can get expensive. But if a short term loan is what you really need and you love the simplicity of using your phone to apply then by all means text your application!

Getting a pay day loan through texting is only the latest innovation for an industry that is rapidly growing in the UK.  These short term loans are the convenient and easy answer to an unexpected cash shortage.

In a fragile and ever changing financial climate, it is becoming even more difficult to make major purchases that you are not able to buy with what is left-over from your salary each month. Banks are cutting back on giving loans to all customers, not just those with bad credit, and a non-essential purchase will be given far less critical status than those applying for mortgages.

However, there are other ways in which to make a large purchase such as a television, car or household appliance, without having to go to the bank at all, and with the right forward planning it is easy to make the right decisions when it comes to planning for and making your purchase.

First off – The fundamentals

First of all, it is important for you to decide on how much it is that you want to spend. Obviously you will be looking into using savings or some kind of credit to buy the item, so remember to work in the possibility of your circumstances changing, to ensure that you will always be able to make repayments, or will be able to afford the loss of savings over an extended period of time. If we take buying a television as an example, work out what are your essentials in the television you are going to buy, and what can be negotiated. You may want a flat screen, but moving down a size will cut the cost drastically. Do you need an inbuilt DVD player, or can you use the one you already have to the same effect, in order to keep the price down?

Saving in advance of making a major purchase is always to safest way to go about it, because you are spending your own money and will not have to make repayments to a third party, just taking out what you can afford from your salary each month to go back into your savings account to top it back up. To amplify your savings in a short amount of time, it may be worth drawing up a budget for a short amount of time, say three months, and living as cheaply as possible in order to put a substantial amount into your savings account each month. Living on a smallest possible amount of money can be a challenge, but when you are saving for something which will ultimately last for a far longer time than the period during which you had to live on a budget, the pros far outweigh the cons!

Take a look at comparison websites to find the item you are looking to buy for the very cheapest price possible without having to compromise on quality. Comparison websites list trusted sellers and show ratings for products so that you can make sure you are making the right decision before committing to buy. It is also worth looking for items second hand, and high street stores such as Cex and Cash Converters can stock high quality goods for a fraction of the original price, meaning you get the exact item you wanted without having to worry too much about the cost. Ebay and Gumtree.com are also great ways of picking up a bargain, just make sure to check the seller’s credentials to ensure you are going to get good quality products.

When it comes time to make your purchase, if you have decided against using your savings and want to buy the product straight away and then pay it back in instalments, a low interest credit card might be a good idea. Credit cards allow you to spend more than you could afford with your pay cheque, and then pay it back over a period of time. As long as you pay over the minimum amount you can basically choose how long it takes you to pay back. If you are looking for a faster payment plan and already have some of the money towards the item, a UK payday loan might fill the gap, allowing you to make the purchase and pay back the loan with your next pay cheque. When taking out payday loans, always ensure that you will be able to pay in back in full come your next pay day, and with this being the case this can be a good way to make the purchase immediately (especially if buying a household item that is needed day to day) and pay back the costs once you have a bit more expendable cash.

Payday loans are certainly not difficult to find any more. Searching for payday loans on Google brings up over 32,800,000 results, all offering amounts of quick cash between £100 and £1000, most requiring no credit check and offering to deposit the money into your account within 24 hours. With this wide choice of similar seeming loans, and because you will only be borrowing a relatively small amount of money, it can be tempting to choose the first loan you come across to make the process even easier. But for your own peace of mind, and to ensure that you really do get the best deal for your personal circumstances it is worth searching around for a loan that not only fits you perfectly, but also gives the best value for money and easiest repayment options.

Reputable payday loan lenders

It is important when taking out any loan that you check the firm you are using is reputable. This can be easy to check, as an Internet search will quickly bring up any bad reviews or warnings, as well as recommendations for other sites you might want to borrow from instead. A good lender will not surprise you with hidden charges when you come to pay back your loan, and will be regulated, meaning you are protected by the law should your circumstances change and you find yourself unable to pay back the loan. Make sure when you sign the loan agreement that the full amount repayable is stated clearly, and check the small print to make sure you are fully aware of the terms of the contract. A payday loan is a short term debt, but it is still a binding financial contract that can get you into serious financial trouble should you go back on the terms of your agreement.

Browse around different firms to make sure you pick a loan that has repayment terms that are agreeable to you. Perhaps you only need the loan for a week, or are looking for a slightly longer term loan of up to 6 or 9 weeks. There are different companies offering these loans and if you pick a loan that fits your ideal repayment time you can avoid paying extra on your loan, or finding yourself with high levels of interest or penalty charges should you take longer than expected to pay bac the loan. Think carefully about your needs and the finances available to you before you choose your perfect payday loan. Check that the fee/interest is not over the odds by comparing loans and interest rates on different sites. Payday loans are renowned for having high interest rates, but you should generally be looking to pay back around £25 for every £100 borrowed. If the interest doesn’t make sense to you then make sure the company explains it in clear terms to you, or look elsewhere. Find out what will happen should you struggle with repayments, as some firms will extend the loan without penalty, whereas with others you may find yourself paying back the full cost of the loan multiple times over should you struggle to pay it back.

Shopping around for the best deal

Use review websites to compare payday loans lenders, and to do some research before you borrow. On these sites you can often find real customer reviews, as well as additional information that might not be available on the sites themselves, to avoid the ‘hard sell’ and just get the basic facts about the lender. If in doubt, you should always try to borrow from a site that is affiliated with a financial organisation that you recognise and are comfortable with.

Once you have chosen your lender, it is important that you only borrow exactly how much you need, and make sure that you will be able to pay back the full amount on or before the repayment date. Never borrow more than you can afford to, hoping for the best, because you are almost guaranteed to struggle to make the repayments, getting yourself into a more serious financial situation. When planning to pay back a payday loan, it is also important that you make sure you have enough to pay back not only the loan, but the interest/fee as well. It is not unusual for customers to budget for their loan, forgetting that the repayments will have interest added, meaning the following month they may end up in the same situation and have to borrow again, inevitably getting themselves into a critical cycle of debt.

With all of these measures in place, borrowing from payday loans companies such as Simple Payday should be a helpful and straight-forward experience with no surprises, that will prove a great measure for quick, temporary borrowing.

Payday loans are a good option for customers who need quick cash with a simple application process, those with bad credit ratings and those who only need to borrow money for a short space of time. However, in a situation where you need to borrow between £100 and £1000 quickly, the short term nature of a payday loan can mean that repaying the loan with the following month’s pay cheque leaves the customer with a deficit in their next pay, meaning at the end of that month they will need to borrow again. This can be a deterrent for those needing to borrow quick cash.

If a customer is unable to pay back their one month payday loan in the time set out in their agreement then the interest rises and penalty charges are added. Even if the customer is then able to pay back the full loan over time they may end up paying the full cost of the loan multiple times over. With 120 day payday loans this problem is eased. 120 day payday loans have the same terms as a one month payday loan, and the same benefits; they can be applied for online with no need for credit checks and the cash can be deposited into the customer’s account within 24 hours, but the repayment terms are spread out over 4 months rather than the standard 14-31 days.

Payday loans criticism

Of course, payday loans have been criticised for having high interest rates, and this is no different with 120 day payday loans. The difference here is that the interest or charge is laid out in the loan agreement so the customer knows exactly what they are expecting to pay back and when. Of course, the charges will be higher than on a shorter loan period, but these longer loans can be a good way of ensuring that you are able to stay afloat in the interim period between getting the loan and paying it back. A customer will need to be absolutely sure that in the 120 days between the loan appearing in their account and the final loan installment, that they will have enough in their pay cheque to cover the loan repayments and still be able to cover their necessary living expenses, but should this be the case it can be a way of preventing having to take another loan out in a short space of time.

The installment plan makes the repayments for a payday loan far more flexible, and the loan interest should always remain at what is stated in the agreement, a far safer plan than risking not being able to pay back the full amount on a 31 day loan and watching the interest rack up quickly and sharply to an unmanageable level.

It is always important to remember that the basic premise of a payday loan is that it is a quick fix for a temporary financial problem. The reason the repayment process is so short is to ensure that your financial situation will not change during the loan period and to get you out of debt quickly and simply. It is necessary to make sure that whichever repayment terms you choose fit with your own financial situation best, and that it will not negatively affect your financial situation. Once you have decided on a longer term loan it is worth bearing in mind that a longer loan period is a more significant commitment than a shorter loan, but also that, used correctly, a 120 day loan can be the perfect way of taking out a small loan and keeping yourself afloat without the worry of finding yourself in the same situation the following month.

Recently an unexpected trend in payday loans borrowers has been revealed. It is a common misconception that most payday loans UK will go to students and the unemployed – high-risk customers who will be attracted by the instant nature of payday loans. This is based on the fact that most do not require a credit check or any kind of information about the customer’s credit history. Not so apparently as a study has found that 57% of payday loans customers are middle income earners. These people fall into the £25-50K income bracket, well above the national average and tending to belong to slightly older people in skilled professions. These customers don’t necessarily have bad credit ratings, or debt problems. In fact, they are far more likely to have families and mortgages than the 24% of payday loans borrowers who fall into the lower income brackets.

Why this trend in payday borrowers

So why are people who already earn above the national average unable to get from month to month on their pay cheque? The simple fact is that with the economy at a dangerous low, prices for day to day essentials are skyrocketing, with petrol, food and utilities at an all time high. Rents and mortgages are similarly high, and wages are not rising to meet these costs. So where someone earning £30K a year would have been relatively comfortably off pre-recession, they are now struggling to make ends meet month by month. People still need to feed their families and pay their bills to keep a roof over their heads in a difficult climate, and are finding that their wages and outgoings just aren’t matching up any more. Thus, the quick and easy nature of payday loans proves a temptation when it is still a week of so until payday and the money has run out.

Middle earners may also find payday loans online an easier proposition than low income earners as despite the relatively high interest rates, a fee of £50-£75 for a loan of £300 does not seem like such a large amount of money to those earning a couple of thousand pounds per month, whereas to someone with a monthly income of less than £1000 it is likely to take away from something else that needs to be paid for. Payday loans are also immediate debt, which needs paying back quickly but is also then not a worry for the future. High street banks have been forced to raise their interest rates to an average of 12.49%, a much higher rate than the Bank of England base rate of 0.5%. With bank funded loans, customers are taking on a much longer-term responsibility. Knowing that you are capable of paying off a small loan within a month is one thing, but you can never be sure what your financial situation will be in 6 months, or even a year. High interest rates make bank loans a much riskier financial commitment than before, and make payday loans seem the easiest and most convenient way out of short term debt.

Remember the risks involved in payday loan borrowing

It is always worth remembering when taking out a loan, however small, that it is still debt. If a customer is already struggling with debt then taking out more debt is always a bad idea, whatever your position. If possible, living frugally for a few days and putting the £75 you would have spent on your loan into a savings account on your next pay day will prevent such a situation from occurring the next month, preventing you from falling into an inescapable debt cycle.

Struggling with debt, or living on much reduced means, especially if you have a family is a severe problem, and one that can lead to emotional stress as well as financial worries. Free debt advice services are available for such situations, and can often point you in the right direction for solving these problems easily and comfortably. With middle earners struggling as much as those with a low income, now is a time when there is no shame in seeking financial advice. Turning to a payday loan as a one off solution can be a helpful and convenient way to bridge the gap between pay days, but if this becomes a regular situation it is worth analysing what you can do on your own to fix the problem.

Payday loans can be a useful and easily accessible way of obtaining cash in a financial emergency. With a quick and easy application process, and no need for credit checks, consumers have been turning to online payday loans more and more to fill the gap between paydays, and in times of financial crisis.

However, payday loans typically have high APRs and short repayment terms, meaning that they are not financially viable for everyone. Below are outlined some tips that everyone should take into account when thinking about taking out a payday loan.

Payday loans are not free money

Payday loans have frequently been criticised for having substantial interest rates, sometimes over 2000%. It is worth taking into account that payday loans are rarely meant to be taken out over a long period of time, making this figure somewhat misleading, with the actual amount you can expect to pay being in the region of £25 for every £100 you take out. However, this figure rises substantially if you are unable to pay back the loan within the standard 30 day repayment period set out in your loan contract, and with penalty charges and interest rising rapidly once you have missed a repayment, customers can find themselves paying back the total cost of the loan multiple times over should they struggle with repayments.

UK payday loans online are exactly the same as standard loans in that they must be paid back, in full, under the terms of the contract. Despite being easily obtained and relatively flexible in amounts, they are real borrowings and add to a customers debt in exactly the same way as a bank loan or credit card. When taking one out, you must be prepared to pay it back in full, plus interest.

Research loan providers

Payday loans companies are springing up constantly online. With such a wide range of loans companies offering what appears to be the same deal, it can be tempting to go with the first loan you find, but there are dangers in doing this. Always make sure you know exactly what the terms of your loan are, and how much you are expecting to pay back. For your own safety, you should only borrow from loans companies that are regulated, or affiliated with a financial services provider that you are familiar with, and use comparison websites to get the very best deal you possibly can.

Don’t ask for more than you need

Payday loans offer small loans from around £100 to £1000. In a financial emergency, you should work out exactly what you need to cover your expense and take that amount, with the intention of paying back this full amount on your next payday. In the case of an unexpected expense, it can be very stressful trying to work out where this money is going to come from, and payday loans ease this fear, however, should you take a little bit more cash than you actually need, to ‘get through the month’, you will end up spending far beyond your means, and may find yourself unable to pay back the loan come your next payday, or be forced to take another loan to pay the original one in full, leading to a vicious circle of debt.

Make sure that a payday loan is your best option

Payday loans are a great way to bridge the gap in a financial emergency, such as an essential household maintenance problem, or unexpected bill. In these situations, you are faced with a rare but immediately critical problem that can only be filled with fast cash It is not going to be a regular situation and you will be able to budget and pay the loan back. For general spending, it is best to look at other options with lower interest rates, such as credit cards or an overdraft, and for large purchases a credit card is a good way to buy the product in one payment, whilst paying back over a long period of time without racking up too much interest.

If you are certain that a payday loan is your best option, and that you will be able to pay it back in full, then payday borrowing can be a great way to ease financial stress and get through difficult times easily and without getting into long term debt which will affect your life and credit rating for the longer future.