Wage day advance
A wage day advance can be obtained online with direct lenders. The term ‘wage day’ refers to the day you get your salary and in many ways is a synonym for a payday. In the UK, over forty thousand people search for wage day advances every month.
Like the term quick loans, it’s important to remember that wage day loans are not a new product or even a specific loan definition. As a responsible lender, we go above and beyond to ensure our customers understand what they are looking for and are aware of the alternatives available to them.
Before the introduction of the new FCA regulations, some lenders could and did take advantage of people looking for wage day advance loans. Lenders like Wonga charged a ridiculously high compound interest rate for loan borrowed for just a few days. In fact, the shorter the loan was for, the higher the APR charged. With the introduction of the new FCA regulations, these lenders could no longer take advantage of vulnerable clients, and were forced to cap their daily interest to a maximum rate of 0.8% per day.
Many clients are not aware of the new options available to them. We hope that this article helps as many people as possible to find better and more affordable loans solutions for their wage day advance needs. Surprisingly enough, despite the FCA’s great media campaigns, for the most part, online search trends remain the same.
Here is a tip that can save you a lot of money: Look for a direct lender that allows you to pay the loan early without any penalties. Apply for a loan over a longer period of time, rather than just over a few days. If you can, pay it early and cut the total cost of the borrowing. A two monthly instalments loan is by definition more affordable than a single payment one. If you can pay it early without any penalties, you’re a winner. Even more so, taking a loan for few days and paying it all in one instalment may even increase the risk of getting into expensive arrears.
Real life example
Let’s say that your wage day is at the 25th of the month. For our example, today is the 5th. Unfortunately your car broke down and now you need £400 you didn’t plan to spend. Sure, you can wait until your wage day in 20 days, but how would you get to work every morning?
So you start thinking about the options available to you, and search Google for Wage day advances or Wage day loans. Google will probably offer you some good lenders that would be happy to give you £400 for 20 days. If we calculate the loan with the FCA maximum daily interest rate for twenty days, it would come up to around 16%. In other words, on your next wage day you will have to pay around £464 pounds back.
Is that something you can afford? Think about it – would you be able to pay all your other expenses, or would you need another loan again? If your answer is not a definitive YES I CAN PAY, you may want to consider an affordable alternative.
Now let’s take a look at a different way you might choose to finance your broken car. The best lenders in the UK offer early repayment as part of their “treating customers fairly” policy. As well, new lenders like Cashfloat.co.uk offer same day funding without any extra charge once the application is approved. You can take a £400 loan for two months. This means that in twenty days you would have to pay only £240 instead of the whole amount. If you think you can afford £464 in twenty days, go ahead and pay it all to close the loan. If not, it’s as if nothing happened, you can close it at your next wage day without extra charges other that the normal daily interest.
Despite the FCA’s many efforts to educate the market, many consumers are still searching for old-school, expensive borrowing options. In this article, we tried to explain fresh alternatives available for consumers in the UK to obtain affordable loans online. As a responsible lender, we encourage our customers always to look for a better alternative for their current financial situation. We showed as well that instalment loans from a direct lender can be paid early, and could be a better choice for people searching for wage day loans.
We hope this article helps you and your family to obtain the most affordable loan option available for you. If you need any further information about our products, please contact our friendly staff. Our details are below.