How to Compare Payday Lenders

What is a Payday Loan?
A payday loan, sometimes called a cash advance, is a small-principal, short-term loan that is usually repaid on the borrower’s next payday. Ranging from £50 to £1,500, online payday loans can be applied for online, and upon approval, deposited directly into the borrower’s current account.

Payday loans are a quick and convenient source of credit for consumers with less-than-perfect credit or who have had trouble qualifying for credit from traditional lenders like banks or credit card companies. In order to apply for cash advances, applicants typically need to have a valid bank account, must be at least 18 years of age, and must be employed and receive a regular paycheque or salary.

How Do Payday Lenders Differ?
Not all online payday lenders are the same. Each lender offers its own benefits to its customers. Our payday loan comparison chart rates the top online lenders based on several distinct attributes. Learn more about these important attributes and how they might affect your decision:

Loan Amount
The maximum amount of money a lender will be able to lend you based on the information you provide in your application.

Publicly Traded Company
A publicly held company is owned by the public with shares traded on the open market. Generally, doing business with a publicly traded company provides greater security and safety, since they are subject to greater regulation and scrutiny. Public companies have greater access to financing than other companies, as they have the ability to issue more stock, and they are subject to greater regulation.

Loyalty Program
Some lenders provide special discounts to repeat customers that make timely repayments and use the service responsibly.

Referral Program
Some lenders provide discounts or rewards to customers that successfully refer new borrowers to their company through the program.

Live Chat
Similar to instant messaging, some lenders feature live chat on their websites, which allows customers to talk directly to customer service representatives online.

Affiliations
A good sign of a trustworthy lender is whether they follow the best practices of industry trade groups, which promote fair and honest lending practices. These groups include:

• Consumer Finance Association (CFA): CFA members offer customers quick access to small sums, through high street offices and the internet. The CFA encourages the highest standards among its members and their staff in terms of transparency, customer service and responsible lending. CFA members offer customers quick access to small sums, through high street offices and the internet. The CFA encourages the highest standards among its members and their staff in terms of transparency, customer service and responsible lending.

• CIFAS: The CIFAS is a not for profit membership association dedicated to the identification of financial crime and prevention of fraud and staff fraud. CIFAS goes to great lengths to ensure that innocent victims of fraud are protected. A CIFAS warning against an innocent victim warns other CIFAS Members to carry out further checks which may include seeking confirmation of identity to confirm they are not dealing with the fraudster. This ensures that innocent victims do not find themselves being chased for money they do not owe. The CIFAS is a not for profit membership association dedicated to the identification of financial crime and prevention of fraud and staff fraud. CIFAS goes to great lengths to ensure that innocent victims of fraud are protected. A CIFAS warning against an innocent victim warns other CIFAS Members to carry out further checks which may include seeking confirmation of identity to confirm they are not dealing with the fraudster. This ensures that innocent victims do not find themselves being chased for money they do not owe.

• British Cheque & Credit Association (BCCA): The BCCA is a membership organization that represents the interests of businesses that cash third party cheques, fund payday loans and other short-term loan products. The BCCA provides representation for its members to government departments and regulatory bodies. Through its Consumer Code of Practice, it establishes rigorous standards of customer care for the industry.
• FLA: The FLA is the leading trade association for the asset, consumer and motor finance sectors in the UK. The FLA represents its members’ interests to government, regulators, the European institutions, the media and the general public so as to improve the working environment in which its members do business.

Security
Online payday loan applications require you to provide basic private information. In order to trust an online lender, you should know that they employ the latest online security features, including:

McAfee Secure^TM: websites displaying this symbol are tested and certified daily to pass McAfee^TM security tests which help protect web users from identity theft, viruses, spyware, and other online threats

VeriSign^TM Secure: ensures the secure transmission of your personal information on the web

Trust Guard^TM Certified: websites displaying this symbol meet all of the requirements for the Security Verified, Privacy Verified, and Business Verified Seals, plus a managing member of the company must supply their name, phone number, email, and have their home address verified using Trust Guards’ double signature verification process

GoDaddy® Secured Site: transactions on sites displaying this symbol are protected with up to 256-bit Secure Sockets Layer encryption

securityMETRICS®: websites displaying this symbol are tested quarterly to ensure that high security standards are maintained, which significantly reduces the risk that the site will be compromised and credit card or other sensitive data will be stolen or misused

Comodo^TMAuthentic Site: ensures the secure transmission of your personal information on the web

Same-Day Funding
If your application is approved in time, some lenders can deposit your funds directly into your current account the very same day that you apply.

Fee for Same-Day Funding
Some lenders charge a fee for same-day funding while others offer it at no extra charge. If you do not want to pay a fee for same-day funding, most lenders typically offer a funding option that takes a few extra days at no extra charge.

Finance Charge
The finance charge (usually represented as a pound amount per £100 funded) is the amount of money that a lender will charge you for borrowing funds. Our example is based on a loan term of 20 days.

Extensions Available
Some lenders give you the option of extending your loan past the original due date. There are extra finance charges associated with an extension, but extensions can be helpful when you can’t pay back the full amount due on your due date.

Direct Deposit
Most lenders offer you the option of receiving your funds through direct deposit into your current account.