Representative Example: On an assumed loan amount of £750 over 12 months. Rate of interest 191.2% (fixed). Total repayment amount £1726.68 and total interest is £976.68. 12 monthly payments of £143.89. My Financial Broker is a broker, not a lender*.
* As a broker, we are unable to ascertain exactly how many customers take out a loan or the lender's rate of interest particular to that customer, therefore our calculation is based on the mean APR of our panel of lenders.
When it comes to finding a responsible lender, there are several things to look out for. We've listed the main six considerations below - your lender should offer flexible options, be as transparent as possible, have good lending criteria, be fair, regulated, and perform appropriate checks.
A borrower should never be encouraged or forced to borrow more credit than they require or they can afford
Lenders should let the borrower control exactly how much they want to borrow, down to the last pound, and then determine the cost based on how many days the borrower needs the loan for
Fees, charges, repayment dates and amounts be must be very clear, before starting the application, signing the loan agreement, and once the loan has been paid out
The lender should ensure that no matter the short term loan product you're applying for, you can pay back early without penalty
When choosing a lender, make sure they use Credit Reference Agencies and appropriate affordability checks. The loan provider must only lend to people who can pay back the money they have borrowed, so you want to ensure they are responsible in their checks
With some lenders, only 9 in 10 of people applying for a loan get approved - most lenders will use a stringent criteria
Lenders should have responsible collections practices, with all repayments consented to in your loan agreement, or verbally should an arrangement be needed
Ensure you apply with a loan provider who tries to come to a suitable resolution should a customer fall into arrears
Check that lenders have no penalty for repaying the loan early
Check whether the lender adheres to relevant Data Protection laws and guidelines
Loan Checks to Look Out For
CIFAS - fraud checking
CallValidate - ID check
CRA - Credit Reference Agencies
Affordability checks - using your details, as well as national statistics (usually ONS data) to check your affordability for the loan
Overall, it's a good idea to do a bit of research into the lender you decide to opt for, or the lender you're put in touch with through our loan matching services. You can often find helpful information by checking out independent review sites such as Feefo and Trustpilot - former and current customers can comment on the service they have received, so you don't just have to rely on the word of the lender.