A Complete Guide To Payday Loans

Here at Wizzcash, we appreciate that sometimes the landscape of payday loans can be confusing and difficult to navigate. There are copious lenders, repayment structures, varying APR rates and terms and conditions all of which can be difficult to decipher – especially if you are new to the industry and to the way it functions. That is why we have compiled this guide for you to read before you apply for a loan with us. This guide will promote clarity and transparency and we will attempt to paint you a complete picture of your payday loan journey. To achieve this, we have split this guide up into 3 separate sections, with a recap at the end of each section:

  • Before You Apply For Your Payday Loan
  • Your Payday Loan Application
  • After Your Payday Loan Has Been Repaid

The main aim of this guide is to provide you with all of the information that you need in order to make an informed and educated decision.

Before You Apply For A Payday Loan

Assess And Understand Your Circumstances

It is important that you assess and understand your circumstances completely before progressing with any application for credit. This means that you are aware of exactly how much money you need, why you need it, and how you are going to alter your budget or spending habits/responsibilities in order to pay it back. You must always remember that any money you borrow will include interest. We recommend that you only apply for a payday or a short-term loan to pay for or to help you in a financial emergency or a one-off situation, for example:

  • Your vehicle requires an immediate repair to restore it to full working order
  • Your boiler breaks down in Winter and must be fixed/replaced as a matter of urgency
  • You receive a utility bill that is far larger than you expected and needs paying immediately
  • You require emergency dental work that is not fully covered by the NHS
  • You are a victim of theft or robbery in the home, losing your wallet or phone
  • You fell ill for a short period but have since returned to work, and need some cash to fill the gap until your next pay cheque
  • The family pet falls unwell or has an accidental and needs veterinary care

It is best practice to only borrow the amount from us that you need in order to cover the unexpected or emergency expense. If you have a dental bill that is £300, then you should only borrow £300. If you need your loan for a home repair or for a boiler replacement, we recommend that you get a quote before you apply for your loan. This ensures that you are never borrowing more cash than you need. You must also budget for the repayments, and make sure that you know exactly how you intend to pay the money back. Use our handy loan calculator to work out how much you will have to pay back on the amount you want to borrow.

Learn The Industry Jargon

This is a really important step that you must take before you apply for a payday or a short-term loan. Learning the industry jargon can help you feel comfortable in applying for credit but it can also help you to get the best deal for you and your circumstances. We have listed below the technical terms that you are most likely to come across on your payday loan journey:

APR – APR stands for Annual Percentage Rate and is always depicted as a percentage. It refers to all costs included on the loan product if the loan itself was taken out for a year inclusive of interest.

Broker – Brokers are able to connect potential loanees to other lenders. They essentially sell a loan product on behalf of providers.

Continuous Payment Authority – This refers to the automated process of taking payments from customers on a pre-agreed basis (both lender and loanee must agree the terms of this agreement). These payments will continue until the loan is paid off in full. The lender in question can only make two attempts to take payment, if both attempts fail then the issue will escalate.

Credit Check – This is a check that is made on a loan applicant once an application is made. This provides the lender with a comprehensive look at the credit history of the applicant and is used in assessing the applicant’s eligibility for a loan.

Direct Lender – Direct lenders deal with a customer directly and unlike brokers can only offer their own loan products/services to customers. You can also get direct lenders who are also brokers such as us here at Wizzcash.

FCA – The FCA, or Financial Conduct Authority, are a regulatory body who monitor and manage the financial markets ensuring fairness and transparency for customers.

Fees – Fees refer to additional costs excluding interest and scheduled loan repayments. Examples of these are late repayment fees (fees incurred as a result of late payments on your loan) and early repayment fees (fees incurred as a result of paying your loan amount inclusive of interest before your loan term ends). At Wizzcash we do not charge an early repayment fee.

Loan Term – This is the length of time in which you will have to pay your loan back. This will be pre-agreed and loan repayments will be scheduled. We only provide loan terms of three months in length.

Monthly Repayments – This is the amount that you will be repaying on a monthly basis until your loan amount has been repaid in full.

 Responsible Lending – Responsible lending refers to fair treatment of customers, transparency and the practice of only lending to those who lenders are confident can repay. One of ways that this is achieved is by way of FCA authorisation, displaying all costs clearly, running multiple checks on applicants and applications whilst offering flexible loans and loan products.

Representative APR – This refers to a rate which is offered to 51% of all loan applicants.

Total Amount Repayable – This is the total amount that you will have repaid once your loan has concluded and paid in full inclusive of interest.

 Recap, what you need to know before you apply for a loan:

  • Why you need a loan
  • Exactly how much you need to borrow
  • How you are going to repay the loan, inclusive of interest and fees
  • The industry jargon

During Your Payday Loan Application

So now you know the jargon, you understand how much money you need to borrow and you have planned out how you are going to pay the money back, inclusive of interest. Now it is time to approach your payday loan lender of choice.

Applying For A Payday Loan Application With Wizzcash

At Wizzcash, we provide loans over a three-month period. We do this because it ensures that the loan is paid off quickly, interest payments do not skyrocket and it allows for effective budgeting; it solidifies our solutions as purely short-term. As mentioned previously we do not recommend that our loans be used as a long-term fix for debt issues.

The next thing that you need to do now is to take your desired loan amount and input it into our convenient slider that is located on our home page. Simply scroll down to the “how much cash do you need” section. Once the amount you need has been inputted, you can apply for this amount by hitting the “apply now” button, this will take you straight to our application form. Once you have filled in your details and submitted your application, we will start processing your application immediately. We will contact you as soon as we have made our decision.

We have provided below an example of a loan repayment structure:

For a loan amount of £300, you will be required to pay a total of £454.

This would be inclusive of 3 payments totally £151.42.

Repaying Your Loan

It is important that you make sure that you pay these amounts on time, and in full. If you do not do this then you could find yourself facing difficulty further down the line regarding applications for credit. This is because missing a payment or defaulting completely on a loan would result in a record of this action being made on your credit file. Should you, therefore, apply for a new mobile phone, this record could mean that you are offered less favourable terms, or you could be refused.

We always actively encourage our customers to repay their loan on time. If you are unable to do this then we must emphasise the importance of budgeting effectively for your loan repayments. Make sure that you have the amount in your account, as many days as you can before the payment is due.

Once the three-month loan period has passed, and your loan has been repaid off in full, then we have some tips and tricks for you so that you do not require emergency help from us again in the future.

Recap, what you need to during your payday loan:

  • Remember that Wizzcash only provide loans over a 3-month period
  • You need to make sure that you repay your loan on time and in full, failure to do so will have a negative impact on your credit score. This means that you must have the loan amount in your account as many days as possible before the loan is due to be paid.

After Your Payday Loan Period Has Concluded

So, you have paid off your loan in full. This is great news and means that you have used our services correctly and safely and have paid off your emergency expense(s) as well as your loan repayments amounts inclusive of loan interest.

We are here for you again in the future should you need to secure yourself a payday loan with us. However, we would recommend that once your payday loan period has concluded that you spend time on long-term finance management, building up savings if you can, in case an emergency or sudden expense should occur again in the future.

We have compiled a blog entitled “how to budget effectively”. In this blog, we outline tactics that you can use in order to maintain effective budgeting over the long term, with the ultimate goal of building up savings so that you are able to handle sudden financial issues yourself should they arise. If your finances are in a sound position when you approach us or any other lender then you should be able to repay your loan amount in full and on time.

If you find yourself consistently falling behind on your finances, if you are worried that your debt issues are becoming unmanageable or if your issues are causing you a great deal of stress and you are struggling to cope then we strongly recommend that you speak to a charity or an organisation who are set-up specifically to help you with your finances and your mental health. These organisations receive specialised training and are equipped to provide you with expert advice and practical solutions. You must take proactive steps to ensure your long-term financial security. The most well known are as follows:

National Debtline:  0808 808 4000

StepChange: 0800 138 1111

Money Advice Service: 0800 138 7777

Rethink:  0300 5000 927

Recap, what you need to know after your payday loan has concluded:

  • You need to make sure that you learn effective budgeting, with the view to building up savings so that you can pay for the unexpected should it occur again in the future
  • For some handy tips, you can read our “how to budget effectively” blog
  • If you are struggling with your finances then we recommend that you speak to a charity, as they are equipped to help you
  • Remember, we are here for you to use again in the future should you need

 We hope that you have found the information enclosed within this guide useful and informative. Furthermore, we hope that you have finished this guide knowing and understanding more about a payday loan, and what to expect, and how to use payday loans effectively without incurring further financial troubles. If you would like to talk to us about a loan, then you can contact us here, and a member of our team will be in touch with you as soon as they are able