Does the lender have a good reputation? Do they look genuine and are they able to answer all your questions? Don’t commit until you feel confident that you’re entering into an agreement with an ethical, legitimate lender.
Do they have a consumer credit license? In order to lend money in the UK, all lenders must hold a consumer credit license. Responsible lenders must adhere to a set code of conduct according to the terms of their license. Avoid borrowing money from lenders who don’t have the consumer credit license as they could be trading illegally.
Are you clear on what you will be paying and when? A responsible lender should provide you with a clear schedule of the repayments of any money you borrow, including the dates, amounts and how it should be paid.
How long will you have to pay back the loan?This varies from lender to lender. Some loans would need to be paid back in 30 days, others might be longer. Make sure that you will have the money to pay the loan back by that date.
How much is the interest (APR) on the loan on top of the original amount? Make sure you find out what the APR figure is on the loan. Since payday loans are designed to be paid back quickly, you should be aware of what you’ll pay in interest. Compare the rates with a few different lenders to make sure you’re getting a good deal. And don’t make any commitments until you are certain you will be able to afford the repayments.
What will happen if you can’t afford the repayments? Find out from the lender whether there would be any additional charges if a payment is missed.
Is the company a real lender or a broker?Some companies which present themselves as a lender are actually a broker, and it may work out better for you to borrow direct from the lender. If you do decide to go with a broker, do you know whether they will charge a fee?
If the lender can transfer the money very quickly after the loan is approved, will they charge you extra for this service?
There are many different types of loans available, so make sure you do your research and this will help you secure the best deal.