Small Payday Loans

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Short term lending business Availability of
affordable loans
2
maximum repayable amount

• They have put a ceiling on the interest, default
  charges and maximum repayable amount for payday
  loans.

3
regulations a majority

• These regulations have changed the landscape for
  the short term lending business. Before these
  regulations a majority of the payday lenders in
  the were charging over 2000 APR with some
  charging up to 5,853 with no limit to the
  maximum repayable amount.

4
competition on interest

• One of the characteristics of this industry
  before the regulations was low competition on
  interest rates. In the other sectors of credit
  lending system this is the primary competing
  point and borrowers pay special attention to it.

5
ease of processing

• They did this by massive marketing campaigns with
  a recurrent theme which championed the ease of
  processing loans through them.

6
less profitable business

• He commented about the new price caps that Wonga
  would be a smaller and less profitable
  business. This is true for almost all the
  remaining payday lenders.

7
payday loans require

• Hence a borrower should be able to choose ideal
  repayment schedule and repay the debt at a rate
  which would suit their budget. On the other hand
  the payday loans require repayment of loans in a
  single installment which means that a majority of
  borrowers have to make a cut in their basic
  living expenses like utility or food in order to
  repay the loan.

8
huge percentage

• Through their high interest rates and high
  penalties they forced a huge percentage of our
  population to live in constant anxiety and
  distress. 

9
bank details

• These, often fee charging, payday loan broker
  asked the bank details of the customers to make a
  request for payday loans on their behalf and in
  the end charged them with high finder fees of 50
  to 75 for a loan of 100. 

10
Interest rate

• The interest rates charged on payday loans cannot
  exceed 0.8 per day. This brings down the overall
  APR and limits the ability of payday lenders to
  overcharge their borrowers.

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biggest setback

• The biggest setback from these regulations would
  be to Payday Loan Brokers. Such a regulation was
  inevitable given the huge number of people
  affected by payday loans and the increasing
  pressure on the government to rein this sector of
  the financial markets.

12
payday industry FCA

• By giving proactive regulations for the payday
  industry FCA has provided good cover to the
  borrowers. 

13
prospective customers

• When the payday loans were available in the mass
  market their strongest point touted to
  prospective customers was their ease of
  processing and repayment.

14
short term loans

• An alternative for these loans are short term
  loans. Again we can see the benefits of these
  loans with the help of an example.

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