Follow Us on Facebook Follow Us on Twitter Follow Us on Google+ Follow Us on Pinterest Follow Us on Tumblr Visit our YouTube Channel Subscribe to our Feed Subscribe via FriendFeed

Connect With Us

UK Payday Lender Claims Customers Are Not Doing Their Homework

by Jim ONeil on March 14, 2012

in Payday Loans News

Payday loans APR are known for being quite high, with many lenders offering rates of thousands of percent. This makes it important for prospective borrowers to comparison shop for the best deal. With so many people in financial distress and trying to save money, one would think that they would make every effort to find cheap loans.

Not true, reports a leading UK lender, who is trying to change this for the better.

InstantLoansDirect surveyed its customers and discovered something quite shocking. Most people applying for payday loans said they used the first lender that accepted their application, with no regard for the financing costs. The findings disappointed this company, which is trying hard to make short-term lending affordable to British borrowers.

InstantLoansDirect is a Harvey and Thompson PLC partner and has been in business for over a century. It offers loans APR approximately 90 percent lower than Wonga and many other well-known payday lenders.

InstantLoansDirect is a new provider of payday loans, entering the market last year. Its ongoing goal has been to offer the lowest loans APR compared to major payday lenders like Wonga. Company representatives were eager to learn how customers selected their loan.

Company founder Giles Coutts noted that many people mistakenly assume that all payday lenders are “legal loan sharks” or are only in business to “make a quick buck.” His company offers an APR of just 448.3 percent, much less than competitor APRs that far exceed 1,000 percent.

Mr. Coutts believes that payday loan interest rates will be driven down by market forces, not interference from the government. He advises consumers to become educated regarding this short-term financing and encourages them to shop around for a loan rather than taking the first offer that comes along.

InstantLoansDirect provides a loan comparison table on its website. The information is updated daily so customers can make the most informed decision.

Loan providers with the largest marketing budgets often get the most attention. This leads many consumers to borrow from Quick Quid and Wonga. Mr. Coutts stated that based on the interest rates they charge, these lenders can afford to spend more on promotion.

All the while, smaller-budget lenders like his company are offering much lower rates. The message needs to spread that shopping around is a good idea when it comes to this financing, he said.

By getting the lowest interest rate, borrowers decrease the amount they must repay. With short-term financing like this, that can substantially lower repayments. These loans are designed to be repaid within 30 days so any way to reduce the amount due is helpful to a financially restricted borrower.

The extra time spent comparing offers is justified by the cost savings.

Labor MP Stella Creasy is one of several politicians who have criticized the payday lending industry for high APRs. Looking at the rates charged by many major lenders, one would tend to agree with her.

However, there are also lenders that charge much lower interest rates for short-term loans that provide immediate financial relief.

Comments on this entry are closed.

Previous post:

Next post: