Choosing the lender to apply for a financial product through is always another question that has to be thought about. There are so many different lenders out there and they can each offer different things to the borrower. Each loan type, and lender also has their own benefits and negative factors.

1. Short term lending
business &
Availability of
affordable loans

2. MAXIMUM REPAYABLE AMOUNT
They have put a ceiling on
the interest, default
charges and maximum
repayable amount for
payday loans.

3. REGULATIONS A MAJORITY
These regulations have
changed the landscape for
the short term lending
business. Before these
regulations a majority of the
payday lenders in the were
charging over 2000% APR
with some charging up to
5,853% with no limit to the
maximum repayable
amount.

4. COMPETITION ON INTEREST
One of the characteristics
of this industry before the
regulations was low
competition on interest
rates. In the other sectors
of credit lending system
this is the primary
competing point and
borrowers pay special
attention to it.

5. EASE OF PROCESSING
They did this by massive
marketing campaigns with
a recurrent theme which
championed the ease of
processing loans through
them.

6. LESS PROFITABLE BUSINESS
He commented about the
new price caps that Wonga
would be “a smaller and
less profitable business”.
This is true for almost all
the remaining payday
lenders.

7. PAYDAY LOANS REQUIRE
Hence a borrower should be
able to choose ideal
repayment schedule and
repay the debt at a rate which
would suit their budget. On
the other hand the payday
loans require repayment of
loans in a single installment
which means that a majority
of borrowers have to make a
cut in their basic living
expenses like utility or food in
order to repay the loan.

8. HUGE PERCENTAGE
Through their high interest
rates and high penalties
they forced a huge
percentage of our
population to live in
constant anxiety and
distress.

9. BANK DETAILS
These, often fee charging,
payday loan broker asked
the bank details of the
customers to make a
request for payday loans on
their behalf and in the end
charged them with high
finder fees of £50 to £75
for a loan of £100.

10. INTEREST RATE
The interest rates charged
on payday loans cannot
exceed 0.8% per day. This
brings down the overall
APR and limits the ability of
payday lenders to
overcharge their
borrowers.

11. BIGGEST SETBACK
The biggest setback from
these regulations would be
to Payday Loan Brokers. Such
a regulation was inevitable
given the huge number of
people affected by payday
loans and the increasing
pressure on the government
to rein this sector of the
financial markets.

12. PAYDAY INDUSTRY FCA
By giving proactive
regulations for the payday
industry FCA has provided
good cover to the
borrowers.

13. PROSPECTIVE CUSTOMERS
When the payday loans
were available in the mass
market their strongest
point touted to prospective
customers was their ease
of processing and
repayment.

14. SHORT TERM LOANS
An alternative for these
loans are short term loans.
Again we can see the
benefits of these loans with
the help of an example.

15. Thanks for Watching
More information :-
http://www.bfwggrants.co.uk