Payday loans have been there for many years and a lot of changes have been taking place in the sector. The rate of interest which the payday lenders have charged for the amount that is advanced is quite high. However, in places like London, the borrowers should brace themselves for new and far reaching changes.
There have been an amendment to the banking act which seeks to cap the interest rate at a maximum of 36 percent. This is likely to push many payday lenders out of business. This capping of interest rate is expected to take effect from July 1st this year.
It is indeed a fact that the rate of interest which payday lenders charge is ridiculously high. At times, there are those who charge up to 460 percent per year. This is a crazy amount by all standards, but considering the risk which they carry, they could be worth it. So, the 36 percent maximum rate of interest should see many of them closing down their businesses.
There are hundreds of payday loans providers all over the United Kingdom and many of them operate online. From the statistics that are available, these firms seem to be making decent amounts of money in profits. With this government action taking effect, a higher percentage of these firms are more likely to close their doors. At the same time, those which will remain operational will at least have to do with reduced profits and a better service to the general public. The companies which will remain may have to redefine their business strategies and direct their lending towards other sectors that are productive such as auto title lending which could fetch them as high as 204 percent annually.
The idea of payday lenders closing doors may be bad news for some, but the benefits that are to be derived are numerous. This firm that will remain in business in London will be able to play by the rules even though its profits will reduce.
Have you ever woken up two weeks into the month, looked at your bank balance, and wept. Well I haven’t as I don’t need to look at my account two weeks into the month as I know it is already empty. OK I’m being glib but I think a lot of you know where I’m coming from. There are a lot of people out there whose money just doesn’t seem to go far enough. I am one of them and I seem to be forever turning down social occasions if they happen to be in the last fortnight of the month. Now payday loans are just one way to remedy the situation ( but as I am neither robbing a bank or selling a kidney they are top of my list)but they work for me.
Now people use payday loans for many reasons. Last minute unexpected bills, a forgotten birthday or just to have a bit of extra cash to play with. Now I fall into the later category as I never use payday loans for the same thing twice but its always to just give me that extra bit of cash. That’s not the why though. The why is quite a simple one in my case and it’s the reason why me and all my colleagues use Payday Loans on a regular basis.
We all work in sales. Now in sales two things are a certainty. One is that you work in advance (in my case one month in advance) and the other is that your pay will vary. Now this is the perfect model for payday loans. You have a bad month, but as you work a month in advance you know next month is going to be better, so payday loans are there to help you out. So what if you didn’t sell that extra car, phone or advertising space this month. Just relax and realize payday loans are there for you.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk