New payday lenders appear and disappear all of the time, so it can be really difficult to understand the different criteria and compare interest rates – particularly when, often, payday loans are fairly urgent.
What was previously a good option might no longer be viable, and there might even be new options that are better suited to your financial situation.
We’re here to help you understand what exactly payday lenders are, what kinds of loans are available, and how brand new payday lenders might differ from traditional lenders that you might be more familiar with.
What is a Payday Lender?
Whether you’re borrowing from an established name or a new payday lender, the format will likely be the same.
Payday loans are short-term, high-interest loans often used for emergency expenses or unexpected bills.
The names ‘payday lender’ and ‘payday loan’ refer to the typical situation in which someone would take out an emergency loan of this type. They’re very often a small amount, borrowed just before payday and can be repaid fairly quickly.
What Regulations Do New Payday Lenders In the UK Need to Follow?
Like all other loan companies, new payday lenders have UK regulations that they have to adhere to. This is to protect those taking out these short-term emergency loans.
In 2015 the Financial Conduct Authority (FCA) brought in additional protections for short-term borrowers that any new payday lenders would have to apply. This ruling was brought in for high-cost short-term credit, also known as HCSTC.
Payday lender legislation to be aware of:
- Limits on the costs of high-cost short-term credit options, such as short-term and payday loans, were implemented to guarantee that borrowers did not incur interest and fees exceeding 0.8% per day.
- Capped default fees to protect borrowers struggling to repay their payday loans.
- A limit to how many times a payday loan can “rollover”. This usually refers to entering a new agreement for the remaining balance repeatedly, causing a cycle of debt.
- Lenders must be clear about the terms of the loan and outline the repayment schedule.
- Lenders must follow fair and ethical debt collection practices. They should not use aggressive or misleading tactics when dealing with borrowers in arrears.
- Lenders must comply with data protection laws to ensure the security and confidentiality of borrowers’ personal and financial information.
These regulations help to keep borrowers in control of finances and offer solutions to better consolidate debt long-term.
Who Can Apply For a New Payday Loan?
Payday loans from both established and new UK payday lenders will have similar requirements for applicants. This is to protect the borrower and also to ensure that lenders are not lending to those who would face great financial hardship or be vulnerable if they took out a short-term loan.
Typical requirements for applicants include:
- Being over 18 years of age
- Being a full-time UK resident
- Being employed (full-time or part-time) in order to maintain repayments
- Having a valid UK bank account
- Having a valid email address and phone number
Some payday lenders will have credit and income related requirements, but this can vary between lenders. Work with a broker to learn more about how individual circumstances can impact an application.
How Can I Get A Payday Loan?
Payday loans are available through a number of channels. The difficulty comes in knowing which loan products are the most suitable for you, and understanding the criteria that will make you eligible.
For this reason, many choose to use services that can help alleviate that problem. Companies like ourselves can put you in front of a panel of UK payday lenders without you having to apply to each individually. This can be beneficial in terms of both the turnaround for you to access the funds, and it also reduces the impact these repeated searches will have on your credit score.
Get started with your application – it takes 15 minutes on average! – Apply Now
The Process of Getting New Payday Loans With Badger Loans
- Firstly, decide on the loan amount you need. Be sure to consider affordability.
- Fill in a short form on our website, badgerloans.co.uk. The whole process should only take around 15 minutes.
- Next, we will use this information to search for new payday loans in the UK.
- Await your decision – this is usually a quick process but if your circumstance is more complex, it can take longer than usual.
- Finally, if you are accepted, you can receive your loan the same day.
Am I More Likely To Be Accepted By New Payday Lenders?
In many cases, new payday lenders are more strict in who they choose to lend to. The exception to this rule is where new lenders are linked to a large, well-funded lender. Payday loans are considered to be a fairly high-risk product and therefore are more cautiously rolled out by newer companies.
If you’re unsure about whether you will be accepted, your best option is likely to be to apply via a broker (like us) and you’ll be presented to a large panel, which will increase your likelihood of acceptance with minimal impact to your credit score.
What is the Difference Between a New Payday Lender and a Broker?
Generally, a UK payday lender and a broker are different parts of the loan approval process. A broker will help you to find and access new payday loan products, and the lender is the one actually providing the funds.
Typically, a broker, like Badger Loans, will receive a commission directly from the lender so their service is free to you.
The agreement and repayment terms that you have will then be with the lender directly, and once you have that agreement in place the broker is rarely involved.
Badger Loans, New Payday Loan Broker
Badger Loans offers borrowers access to a range of flexible loan products, giving the choice of loan length (3 to 60 months) and borrowing amount (between £100 and £25,000).
We also offer unsecured loans, meaning there is no collateral required and your loan is subject to status.
- Borrow between £100 and £25,000
- Repay over a chosen period between 3 months and 60 months
- Work with lenders directly
- Zero upfront fees
- We don’t personally* hard credit check
- There is no guarantor required
- Same day funding available
*Chosen lenders will likely credit check you before providing funds. We, as the broker, will rarely run our own checks.
Where Can You Get Help If You Need Advice On New Payday Loans (UK)?
Firstly, before you take out a loan, you should ensure you are able to repay it. Affordability is key for both short-term and long-term financial health.
If you are finding it hard to repay your loans, here are some great resources and organisations that can help.
