This week in the news there has finally been some support for payday loans within the media; the Telegraph, no less, has produced an article which calls for a fairer representation of legitimate payday lending.
Dan Hyde, Telegraph Deputy Personal Finance Editor, has taken the first step towards a more accurate and level-headed response regarding a sector that has become a hot topic within the media, politics and even the Church for a number of years now.
For some time now lenders of loans for those with bad credit have tried to swim against the tide of media representations and vehement public opinion when it comes to writing about payday loans with transparency. We believe that payday loans are one of a number of financial products available to the consumer, forming part of a flexible and wide-reaching market including bank loans, credit cards, secured and unsecured loans etc.
The difference being, however, the amount of outcry aimed at the payday loan sector which unfairly presents all lenders and brokers as unlicensed, irresponsible loan sharks seeking to place its customers in unmanageable debt at all costs. This is clearly not the case for most companies who actually care about their products, the sector and the customers they serve.
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Unfortunately, as with all markets, there are rogue traders and the financial sector has had more than its fair share of these. That is why the payday loan market is so heavily regulated and rightly so because companies such as Purple Payday, are responsible and legitimate and do not undertake any underhand or immoral practices when it comes to lending or promoting their products. With tighter regulations it is easier for the public to become aware of those companies who are working hard to provide an excellent service to customers, and those who are simply trying to make a quick buck by forcing customers into obscene levels of unmanageable debt.
Hopefully, we will see a gradual change in the way payday loans are viewed and discussed, with a more positive reflection of legitimate operators. But, if not, then we will still work hard to argue our case for a fairer representation by supplying customers with our most suitable and affordable loans.
MP backs them!
Local MP Nadhim Zahawi has made a case backing payday loans companies, claiming that without them borrowers would be forced to turn to illegal, dangerous loan sharks.
Legitimate payday loan companies will have a credit licence, meaning that they are fully regulated and will follow legal lending procedures. If these legal lending practices were to be removed, worry has been expressed that desperate people who cannot obtain a bank loan would end up facing dangerous and unethical loan sharks who have been known to resort to violence and cause harm to borrowers and their families in order to collect their money.
These claims have come as a result of Labour leader Ed Milliband vowing to “clean up the payday lending industry” by imposing a legal limit on the cost of credit charged by these lenders. He feels that there should be a cap on the amount that borrowers can be charged by payday lenders, and by implementing this he thinks that consumers will benefit greatly from a fairer service.
This decision has spawned Mr Zahawi to claim that
“If desperate people do need credit at short notice, I would prefer that they got it from legitimate companies which can be monitored and regulated, rather than through illegal means”.
Finally, we see a step in the right direction in terms of changing the perception of payday lenders, however a lot still needs to be done in order to reverse the current stigma surrounding the somewhat controversial industry.
What are bad credit loans?
A bad credit loan is any type of loan that is lent to a person who has poor credit or who has no credit history. Poor credit relates to a credit score that is attached to an individual and it can be considered as being ‘bad’ for many reasons such as where the person has made defaults on past credit, has been subject to County Court Judgements (CCJ’s) or has been declared bankrupt.
Bad credit loans were traditionally found at high street outlets, such as banks, but this has changed over time with the development of a rapidly growing online platform. This platform benefits from a much faster application process compared to the typical face-to-face procedure and, until this development, it took weeks for an application to be approved. Now, through online lending, successful applicants can receive their loan within a matter of days, enabling faster money transfers and an overall simplified process.
Not all lenders in the financial market offer loans to customers who have bad credit, but with the stagnant economy these figures are starting to rise. People who have adverse credit histories can shop around to find specialised loans to meet their needs and be happy in the knowledge that there is a loan out there for them.