By Jocelyn Ian
If you are just starting out on your search for financial assistance you may have come across payday loans and credit brokers. Whether you choose to look for a payday loan on your own and compare different lenders directly, or use the services of a credit broker that can provide you with access to a range of loans and charge you a fee for the connection, it is important to be prepared. Always run through your own financial incomings and outgoings and work out exactly how much you can afford to pay back each month before even contemplating whether or not to proceed with a payday loan application. If you do decide you want to go ahead, always read the small print, do your research on the credit broker or payday loan lender that you are working with, understand your obligations and your rights.
Credit brokers are companies that can help you find a loan. In some cases they are geared towards helping those individuals who have struggled to be accepted for a loan or credit applications elsewhere, such as people with bad credit. You can find credit brokers that specialise in bad credit loans, payday loans, or high-cost short-term loans for other purposes. These companies charge either a flat fee or a percentage of any service that they direct a person successfully to.
There has been a problem with certain credit brokers in the past in that they have failed to make it clear to customers that they are credit brokers, and not the direct lender. In other cases, the credit broker has failed to make it clear that there would be a fee attached to the service, or have failed to let the applicant know what the fee would be exactly.
Always do some digging before agreeing to sign up with any financial service or product, as it could protect you legally in the long run. Find out whether a company is listed as registered with the Financial Conduct Authority (FCA), and if you are unsure as to the credentials being offered to you, notify Trading Standards and the FCA immediately and they will investigate the matter.
There is no reason why you have to use a credit broker. Instead, you can compare payday loan providers independently.
Always be fully prepared whenever you are applying for credit of any sort, whether it is through a credit broker or direct through a payday loan provider. Understand your financial limitations moving forward, as if you cannot afford to make the agreed repayments you might find that you are in greater financial difficulty than prior to seeking a credit service. As long as you are fully aware of all fees and interest on top of a loan, even if it is only for a short payday loan over the course of a few days, you will be fully prepared to cover the costs and not be hit with hidden charges. Responsible payday loan lenders will always provide with transparency and options moving forward.
