New regulation in the payday loan sector

Thursday, 30/10/2014

New lending guidelines by the FCA will standardise more effectively the payday loan sector. The development is welcomed by those companies who already take responsible lending seriously, and we look forward to seeing the less scrupulous lenders have to change their practises or leave the sector altogether. It is these companies that give the whole sector a bad name. With more regulation, resulting in customers getting a better deal and being treated more fairly, hopefully this will go some way to cleaning up the perceived image of these companies. If trust and a good service are provided there is no reason why payday loans cannot become a normal part of the financial landscape.

 

Choosing the right loan

As ever, there is the need for consumers to be responsible in their borrowing, too. While lenders are being forced to adjust their policies, it is also essential for consumers to be aware of what they can realistically pay back, and the impact of high interest rates on the money they do borrow.

Many consumers find the need to borrow, and sensible borrowing can even help your credit score. However, it is always important to consider whether money can be saved simply by cutting costs. The need for borrowing might not be completely eliminated, but the amount required could be reduced considerably.

Whether your loan with Wonga was reduced or written off, or if you are just considering taking out a new loan, it is always important to think beyond just what a lender is willing to lend and also consider whether it is necessary and if you can handle the added payments. Lending can be a huge help to many people, but it can also create additional problems, as many Wonga customers found out the hard way.

Payday loans are not suitable for, and would be expensive as, a means of longer term borrowing and are not appropriate if you are in financial difficulty.

Representative 1269.7% APR

Back to resources

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk