Here at Wizzcash, we are an authorised payday loan lender, and we adhere to ethical lending practices. We provide our loan products to individuals who are in need of financial assistance, and who meet our eligibility criteria. We have used our experience and knowledge in the industry to put together this infographic that you can see above, and the content that you see below, to provide clarity and understanding over the uses of such loans and to shed a little light on the industry in general.
In this section, we are going to outline the proper uses of a payday loan. But first, we will run through a very brief history of the origins of the payday loan. Originally, a payday loan was simply meant to provide you with a cash injection before your payday. This was designed to provide you with the financial means to pay for an emergency expense, or, to offer assistance in a financial emergency. If accepted, you would then use your loan to pay for this expense/emergency, paying the payday loan off in full (inclusive of interest) on your actual payday. Now, the industry has evolved with various repayment terms and structures in place to afford flexibility for the loanee. Despite this evolution, a payday loan from us should only be used in a financial emergency, for the purpose that was originally intended (on an emergency expense). The following are examples of a financial emergency, and therefore a potential reason for securing a payday loan:
Replacing Vital Appliances Or Electronics
This covers a wide range of different situations. The one important factor being the impact on your everyday life. If a vital appliance or electronic device breaks down, then you could need to repair or replace it as soon as you can. Examples of such devices are:
- Your oven
- Your fridge/freezer
- Your washing machine
These are of course important and expensive vital household electronics/appliances. Less expensive examples would be such things as:
- Your hands-free telephone (if you do not have a mobile phone with free minutes)
- Your kettle
- Your iron
- Your microwave
These devices and objects can be vital to everyday life. Should one of these break down unexpectedly and need replacing or an urgent repair (with you lacking the funds to carry out this replacement or repair) then a payday loan may be able to help you.
Replacing Or Repairing Your Primary Mode Of Transport
Your primary mode of transport can be any of the following things:
- Your car
- Your van
- Your motorbike
- Your pushbike
If any of the above are essential for your travel, especially to and from work, or used in your day-to-day working routines, then a short term loan can be a way to help you carry out the repair that you need in order to make this vehicle operational again. Examples of vehicles that are used in day-to-day work routines are vocations such as delivery drivers and tradesmen, the latter who use their vans to go to and from jobs with all of their equipment in situ in the van. If you use your car for the school run, and you don’t have the money to for the required repair(s), then this may be viewed as a financial emergency.
Paying For Medical Or Veterinary Expenses
Of course, the NHS is free for use in the U.K, but there are some instances and scenarios that will mean that you need to go private for either a consultation, treatment, diagnosis or surgery. Going private can incur great cost.
Veterinary bills can be incredibly expensive and even a consultation may well end up costing you a large sum. If your beloved family pet falls ill and requires immediate treatment, but you simply do not have the funds available to finance their care, then a payday loan can be used to fill the gap in your expenses.
Paying For Larger Than Expected Bills
Sometimes no matter how well we plan, our bills can run away from us, rising dramatically; this then throws your entire budget out of alignment. Larger than expected bills can strike at any time, and can come in the form of:
- A mobile phone bill that far exceeds your monthly direct debit amount (this could be the case if you have gone over your data limit)
- A broadband bill (if you have exceeded your download/upload/bandwidth limit)
- Utility bills, such as a water bill (if you are unaware if you have had a leaky pipe/taps) or a winter heating bill (where you used more heating than was estimated and decided to switch supplier, leaving you with a large lump sum to pay)
To Restore The Functionality Of Your Heating System
If your heating system or any constituent parts of your heating system break down then you may need to fix this as a priority, especially if this occurs in the heart of winter. A repair or a replacement of your heating system (whatever you need to do to restore full functionality) can be costly, with a payday loan you can pay for the fixes that you need if you do not have enough money to cover the repair.
The general rule of thumb regarding the proper use of a payday loan is that if non-payment of the situation in question would cause a rapid deterioration in your personal circumstances, wellbeing or health, then it would constitute an emergency and a payday loan may be an option when you lack the money to help yourself out of the applicable emergency.
The Payday Loan Eligibility Criteria
Our criteria have been put into place for several reasons, the most important of them being:
- To ensure that we always remain fully and completely FCA compliant, acting within pre-agreed guidelines, rules and regulations set out either in law or by other advisory bodies
- To protect the loanee, by this we mean that we try as hard as possible to protect the loanee from falling into further financial difficulty, we run credit and affordability checks to ensure that the loan amount is payable (inclusive of interest).
- To treat customers fairly. This includes being upfront and clear, avoiding misleading information whilst also making sure that we are selling the right product to the right person. Furthermore, we only offer relevant and suitable advice, with loans that meet a need and meet expectations.
The core components of our eligibility criteria are as follows:
- You must be, at the time at which your application is made, at the very least 18 years of age
- You must be in a form of employment and earn at least £750 per month once tax and national insurance has been deducted
- You must be a lawful member/resident of the United Kingdom (we cannot offer a payday loan to any individual who is not a U.K resident).
- You must have a valid bank account with a valid debit card that is currently in use
As a responsible lender, all of our criteria have been put into place for compliance, for customer protection, and in line with treating customers fairly. We never want to be worsening a financial emergency, in fact, we were set up in order to provide emergency financial assistance for individuals who have exhausted all other options for emergency finance.
Our 3 Month Loan Repayment Periods
Most other lenders will allow for a number of different repayment periods, starting at 1 month and rising to up to 12 months. With a 3 month period that is fixed, we believe that we are able to:
- Split the repayable figure into 3 manageable payments, rather than 12 payments, or 1 payment
- It allows for adequate planning over a short space of time, financial circumstances can change over a 12 month period
We also allow all of our payday loan customers to repay their loan off early if they are financially able to do so. We also do not charge our customers any early repayment fees.
Wizzcash, Ethical Payday Loan Lenders
We hope that the information above has cleared up the proper uses of a payday loan, and that it can then lead to the responsible use of this emergency avenue of funding. We also would be pleased if we were to have offered some clarity regarding our eligibility criteria. To learn more about our payday loans here at Wizzcash please see how it works.