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Payday advances, along with other short-term lending

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Payday advances, along with other short-term lending

What exactly are payday advances?

Pay day loans are a kind of borrowing referred to as “high-cost, short-term credit”. You borrow between ВЈ50 and ВЈ1000 and spend back once again the mortgage with interest, in a single re payment on or soon after the next payday. This sort of borrowing is commonly higher priced than various other forms of credit.

There are some other forms of short-term financing, including:

  • instalment loans – payments are spread monthly or weekly over several repayments, typically between three and 12 months
  • ‘running credit’ or ‘flex credit’ – the way in which this works is comparable to a bank overdraft, borrowers and provided a ‘limit’ they need to, provided they pay at least the interest off each month that they can draw up to as an when. This type of credit is expensive and intended for short term use only while the credit agreement has not fixed end date.

Types of complaints we come across

We have complaints from customers whom reveal that loan providers:

  • lent them cash without checking they can’t pay that they could afford it, and now they have a lot of extra interest and charges
  • had been unreasonable or unjust whenever their financial predicament changed
  • just weren’t clear about whenever re re payments had been due

That which we have a look at

As with any loan providers, short-term loan providers need to ensure that they’re offering credit in a accountable means. They must finish reasonable checks to ensure you are able to settle that loan before agreeing to it.Read More »Payday advances, along with other short-term lending