The Payday Market in the UK

Payday loans have been popular in the US for a long time, but in the UK it is just in the last few years that they have really taken off. Recently, there has been a real surge in their popularity with many borrowers turning to payday loans as the easiest way to get emergency money. In a large part, this is because of the recession in the UK, which has led to many financial institutions tightening their restrictions on lending, combined with many individuals’ credit scores taking a battering.

This increase in popularity has come hand in hand with an increase in the degree of scrutiny payday loan providers are subject to. There have been accusations of certain companies taking advantage of the vulnerable. Advertising high-interest loans to people who may be unable to pay them back is not something we condone. Although the individuals who take out such loans must be in some part to blame, this is also bad practice and puts the many honest payday loans companies at a disservice by association. Currently, OFT is looking into 30 UK payday loan companies and evaluating their practices. This is something which we approve of and we will only use lenders which pass this investigation. We ensure that only those who can fulfill the minimum criteria will be approved by Fido Payday. We also go above and beyond this in our dedication to responsible lending. The priority is ensuring any loans can be paid back before they are granted.

Lenders in the UK

As payday loans become more popular, the number of companies providing them has increased exponentially. It is now common to see adverts on prime-time television and sponsorship deals with payday loan companies’ names on them. This increase is a positive development, bringing competition to the market and a wider range of choice to customers looking for a loan. However, the criteria by which the loans are granted has remained largely the same.

By using a wide range of lenders, we’re able to find an option which directly fits with what the customer is looking for. Our experts look at a number of different factors, but the number one priority is always that the customer will be able to pay the money back.

Currently, the CCA (Consumer Credit Association) dictate the rules which govern payday loans and are responsible for issuing licenses to lenders and brokers. OFT (Office of Fair Trading) are responsible for investigating any complaints and are able to take licenses away from firms who are found to be indulging in bad practices. It is unsure whether regulation is going to increase in coming years, and everyone is waiting for the results of the OFT’s current investigations for some kind of decision on this. The general opinion is that with this Conservative government, there are unlikely to be as many restrictions on this embodiment of free capitalism as there were when Labour was in power.