Where can you go if you need a small check? | Payday loans
Mno one will be sorry to hear that Britain’s largest payday lender, QuickQuid, is going to close, just over a year after the industry’s best-known actor, Wonga, went bankrupt. But if you are in dire need of a little cash for a short period of time, who do you turn to?
CashEuroNet UK, which operates the QuickQuid brand, stopped lending after Grant Thornton, the accounting firm, was appointed a director on Friday.
In recent years, millions of people have turned to payday loans to cover their housing costs, deal with an unforeseen emergency, or even afford their weekly groceries.
But while these quick, short-term loans can sometimes seem like the only option for those with cash flow problems, there may be more affordable alternatives, says the Money and Pensions Service, which bundles the services provided by the Money Advice Service, the Pensions Advisory Service and Pension Wise.
If you need to borrow a small amount for a short time, what are your choices? That is, assuming other options, such as a loan or a gift from family or friends, or asking for an advance from your employer, don’t come up?
An authorized overdraft. Designed for short term borrowing, but costs vary widely. Some banks charge daily, some monthly, some charge interest, and some use a combination of these. However, many banks are currently changing their pricing ahead of the introduction of new rules taking effect in April 2020, designed to make overdrafts simpler, fairer and cheaper.
Borrowing £ 250 via a 31-day authorized overdraft would cost a standard Barclays account holder £ 23.25 (31 sets of 75 pence per day), while for a standard NatWest customer it would cost £ 9.88 (£ 6 per day). monthly fee and £ 3.88 interest). With Nationwide’s FlexAccount, interest is £ 3.70 before November 11 and then £ 7.22 after that, while for the Monzo app-based bank it is £ 15.50 (50 pence per day).
Credit unions. These have long been touted as a vital alternative to payday lenders and can offer a very good deal for borrowing smaller amounts. The maximum they are allowed to charge is 3% per month, although some charge less. If you borrowed £ 250 from the London Mutual Credit Union for a month, you would pay back £ 257.50, or £ 7.50 in interest (although the same day payment adds an additional £ 11). But it might not always be easy to join a credit union quickly and get money fast – some may require you to accumulate savings first.
Payday lenders. There are still a lot of other payday companies out there, but they can be very expensive. If you took out a £ 250 loan for a month from Peachy, for example, that would charge you £ 62 in interest, i.e. the total you would pay back is £ 312.