Finance

Payday Loans: What Is the Difference in US and UK?

A payday loan is a great choice for people who need money on an urgent basis. However, the way they function differs in every country. This is the reason why it is important to know how they operate in various nations. These short-term loans are unsecured loans that are given to individuals by evaluating their transaction history. It is in the US where payday loans have originated initially. Soon, they spread to other parts of the country. According to recent studies conducted on payday loans, almost 40% of young people are using them.

Most payday loan lenders in the UK provide flexible lending limitations for sums greater than $1,000. The interest rate of payday loans can be 25% mostly per month. You can also find some lenders in the UK who provide payday loans at a lower interest rate compared to this. In the UK, FCA has implemented that the lenders who offer payday loans must not collect beyond 0.8% interest per day. The UK government has found unfair lenders and fined them.

Payday loans in the US are also referred to as salary loans, cash advances, etc. It started with 500 lenders in the past, and now there are more than 20,000 lenders in the U.S. Payday loans are banned in many states of the U.S. In the U.S. payday loans have greater interest rates compared to the other types of short-term loans. 

Payday loans are banned in many states of the U.S. due to unfair lending practices. If you are looking for a payday loan, it is better to approach direct lenders always. Loan Pig is one of the leading direct lenders online for many years in the UK. This lender is known to charge a very reasonable interest rate from their clients. Visit https://www.loanpig.co.uk/short-term-loans/ to know in detail about their loans.

As direct lenders take care of everything from the beginning till the end of the loan process, it is better to approach them rather than choosing a broker. When you approach a direct lender, the loan application process would be much quicker. 

The main advantage of choosing a direct lender is, you can avoid sharing your personal information with the brokers. If a lender approves your loan application, the amount will be credited into your bank account in a matter of a few hours. 

Most payday loan lenders offer a payday loan to candidates with a poor credit score as well. However, they must prove that they have the capability to repay loan. Direct lenders will check your payment history and income before approving a payday loan for you. If they feel that you cannot repay back the loan, they will not approve the loan for you. You will find some direct lenders who are also brokers. Approaching such lenders would be helpful to you if you want to avoid time wastage. If they cannot approve the loan for you, they will find a lender for you.

Find a good direct lender in your location today to apply for a payday loan!

rahul panday

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