Payday Lending: Four Tips to Avoid Being Scammed
Payday loans companies are financial companies that provide short-term loans to people who have a steady source income when in temporal financial distress. These lending companies offer fast funds to borrowers to help them offset their financial emergencies.
These kinds of loans come with high interest rates, but their high rates can be justified due to the fact that they offer immediate solutions to unforeseen expenses. A person who is desperate is likely to make mistakes by choosing the wrong lending company and easily get scammed. One has to be careful when opting for a payday loans because, many fake payday loan providers have been linked with scams.
Here are tips that would help you to avoid being scammed.
Make sure lender has FCA seal
Financial Conduct Authority is the body in the UK that sees to it that payday lenders abide by the rules and that consumers are not exploited. The FCA’s seal should be the first thing a borrower should look out for on a lender’s website.
This seal means the lender is genuine and authorized by the FCA to carry out payday lending. Borrowing money from a FCA authorized payday UK lender means the lender can’t cheat the borrower because, there are laws protecting the borrower.
Avoid third-party payday lending sites
Third-party sites have gotten borrowers indebted than they should. These sites help prospective borrowers in distributing their applications to various lending companies. This seems harmless because, the borrower won’t need to pass his/her application to any lender he/she comes across.
This was cool until some payday loan lenders started bidding for borrowers’ personal details from these sites. Some of these third-party sites tend to offer free trial services to applicants only to charge applicants accounts automatically even after the free trial periods must have ended. It is advisable you have direct contact with the lender to avoid being scammed by third- party sites.
Never submit multiple applications
When applying for best personal loans in the U.K, it is also advisable that you avoid multiple applications. Sometimes borrowers believe that putting all their eggs in one basket isn’t the best option and end up applying in various payday lenders’ sites. Forgetting that some of these sites charge them before processing their applications; which doesn’t even guarantee that their applications would be approved. Making them spend quite a lot of money for loans that their approval aren’t certain.
Make sure the lender has a physical address
A payday lender having an online presence shouldn’t be all a borrower should consider when choosing a payday loan company. Mind you, there are several fraudulent online entities claiming to be legitimate payday loan lenders.
Their victims are mostly the desperate ones who didn’t take out time to find out if these companies have physical presence. Borrowers need to be extra careful when choosing payday lenders online. You can differentiate the fake from the legitimate lenders by checking and locating their physical addresses. Genuine payday loan companies have online and physical establishments.
Physical presence makes it obvious that they are in UK and are under FCA’s watch.