What is a payday lender and how to chose one.

Mar 162011

Payday Lenders

What is a payday lender?

Payday lenders are financial lending companies who specialise in short term lending – 31 day term typically. These short term loans are usually referred to as payday loans because the borrower is expected to pay back the loan at their next payday. The application process for a payday loan is very straight forward; payday lenders, therefore, are usually able to offer a simple application form online. Users can apply and get a response in minutes.

Is a payday lender a loan company?

Yes, a payday loan is still a financial loan, albeit over a short, fixed term. So a payday lender is still a loan company. As such they are regulated by the OFT and must have a Consumer Credit Licence. When you take out a loan with a payday lender you enter into an agreement to get access to instant cash for a fixed fee.

Do payday lenders offer any amount of money.

No, typically payday lenders offer loans of smaller, manageable amounts that can be paid back in one repayment. For this reason payday lenders typically offer loans of between £100 and £1000. Top Hat Money offer payday loans to first time users of between £100 and £1000. Once clients see how to use the service responsible they can borrow larger amounts.

How to choose a payday lender.

All payday lenders must be registered with the OFT and hold a Consumer Credit Licence. In order to provide you with a loan, lenders ask for and store some of your personal data. So it also a good idea to ensure your lender is registered with the data protection agency.

Top Hat Money holds a Consumer Credit Licence (645 219)
And is registered with the Data Protection Registrar (Z8927661)

Other things to consider are:

How complicated is the application form?
- We offer a simple application form which collects all the information we need to make an instant decision so we normally do not need to contact you for any supporting documents
How quickly does the lender aim to respond to my application?
- We aim to respond to your application within minutes of receiving your form submission.
How quickly does the lender aim to get the money in my account?
- We aim to have the money in your account within 15 minutes of approving your application.
How easy is it to repay the loan?
- We make it as simple as possible to repay your loan, simply provide your bank details and we will collect your repayment by direct debit.
Can I see a statement of account showing what I owe at any time?
- Yes, you will be provided with a user control panel allowing you to access your account at any time so you always know what you owe and when you are expected to repay it.

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