The Competition and Markets Authority (CMA) has called for more payday loan comparison sites in the UK writes Simon Read of The Independent. After a 12-month investigation into the high-cost short-term loan sector, the CMA concluded that payday loan borrowers in the UK could be paying up to £45m a year too much because they are borrowing from lenders with higher interest. Accordingly, if customers were able to compare the price of their payday loan easier, they would be able to apply with cheaper lenders and ultimately pay less for their loans.
The CMA is also demanding that lenders tell applicants up front how much they will be charging if they miss repayment (usually £20). The report also added pressure to lead generators and brokers who charge upfront fees and leave the customer unsure of their loan status or how their loan will be funded.
Compare the Cost of a Payday Loan
The cost of a payday loan is usually measured by APR, the Annual Percentage Rate of a loan that only lasts a few weeks is calculated as if the loan was for a year resulting in figures that run up to 6,000% for such payday loan lenders.
Alternative measures of the cost of a payday include the daily interest rate whereby most high-cost lenders charge 1% a day resulting in a cost of £30 per £100 borrowed. However, a recent price cap of payday loans was announced by the Financial Conduct Authority (FCA) and will come into place in January 2015 limiting payday lenders to charging 0.8% interest per day. This price cap will contribute to significant savings for borrowers and will ensure that no customer will repay double the amount that they originally borrowed, also capping the default rate at £15 maximum for each company.
The Lenders List – Your Payday Loan Comparison Site
TheLendersList.co.uk is an online directory comparing payday loan direct lenders for customers looking to borrow up to £1,500 in the UK. We compare over 30 direct lenders in the UK. We launched in January 2014 after noticing the lack of comparison sites in the payday loan sector. In the industry that is worth over £2 billion, we were concerned about the number of brokers and lead generators charging upfront fees and passing on the information of customers to numerous companies. That is why we only list reputable direct lenders who do not charge broker fees and have a valid consumer credit license and following the responsible lending guidelines by Financial Conduct Authority.
Our list of payday loan lenders shows all the lenders we work with and if you click on ‘more info,’ you will receive information about the types of loan that they offer and checks that they run plus our very own review of that company. We do not store your information or take your details, we simply suggest the different lenders so that you can apply and transact directly through their website. We encourage people to contact us for more information using the ‘contact us’ tab at the top of the page.
By Imran Uddin
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