Unexpected emergencies tend to creep up on us at the wrong time. They become harder to deal with when we don’t have enough cash to cover what’s needed. At times like these, you might find your only option is to borrow the money. If this has happened to you don’t worry, you’re not the only one. The demand for short term loans to help in situations like these has increased. If you can pay the money back out of your next wage, then a Payday loan could be your answer.

There are many Payday loans direct lenders around. If you find you need to take one out, there are things you should consider before applying. Here we’ll go through what to look for from your Payday loan lender.

What is a Direct Lender Payday Loan?

Payday loans are small, short term loans that are designed to help tide you over until you next get paid. This means you pay them back in full usually within a month. Because they’re meant to help you out in an emergency, they’re not suitable for long term borrowing needs.

When you apply for a Payday loan with a direct lender you know who you’re dealing with. This usually makes the application process much quicker. If you apply through a broker, they’d have to match up your information with suitable lenders first. If accepted by any of the lenders, you’d then have to complete the application process with them.

Applying with a direct lender makes it easier to find out information about their terms before you apply. And if you’re approved, the money is paid out fast. Some lenders will send the cash to your bank in minutes. But how do you know which direct lender to go with? Let’s find out.

Which Payday Loan Direct Lender Should You Choose?

As there are so many Payday loan direct lenders out there, you can afford to be choosey. It’s important that you select the right one for you. The things to consider are as follows:

• Are they approved by the Financial Conduct Authority (FCA)? Being authorised and regulated by the FCA is important. It means that they have to follow the government guides on lending. For example, they can’t charge you more than 0.8% interest per day and they can’t charge more than £15 in late payment fees.
• Have a look at what the direct lender’s criteria are. Most lenders will tell you what you need to be eligible to apply with them. For example, they may need you to be earning a minimum salary and have a current bank account.
• How much can you borrow? Some lenders have minimum amounts that you have to borrow. If this is more than what you need don’t be tempted to apply for more. Stick to what you need and make sure you can afford the loan repayments.
• What’s the repayment term? Some payday loan companies will want the loan paid back in full when you next get paid. Others will let you pay it back over a longer period, sometimes up to 6 months as a short term loan. Check the terms and do what’s best for you. If you find you can’t repay it all in full when it’s due, you’re likely to be penalised.
• Check the interest rates. Short term borrowing of this nature is usually costly. The interest rates are usually higher than on standard bank loans. It’s important you know how much the loan is costing you. You should also find out how much in total you have to pay back. Compare the figures with a few direct lenders to see which one offers you the best rates.

Are Payday Loans Bad Credit Loans?

Payday loans are available to everyone. The loans can be taken out by people with good or poor credit scores. This is because the lenders don’t just look at your credit score. Payday loan lenders will consider whether the loan is affordable for you. They’ll do this by finding out what’s going in and out of your bank account so they can assess your affordability.

Be mindful that every time you apply for a loan, the lender might do a hard credit check on you. They wouldn’t be responsible if they didn’t. Having a lot of credit checks (soft credit check and hard credit check) on your file could have an impact on any future applications you make. This is why it’s always better to do your research first. Go with the lender that best suits you and your situation, and never borrow more than you need.

Disclaimer: Note that, we are not providing any financial advice. Our blogs are written for informational purposes only. Also, we are not promoting or affiliated by any of the third party websites that are linked in this article. They are for reference only.