There are plenty of naysayers in the United Kingdom these days when it comes to the online pay day loan industry or the storefront cash advance industry. For the purposes of this article we will consider these to be the same and use the term payday loan for the overall short term, high interest loan industry. This industry is growing exponentially in the United Kingdom and it has its roots in the United States. In fact many of the pay day loan companies that operate in the United Kingdom today are American companies.
While there are many critics of this industry there are many proponents as well, including the millions of Brits who take advantage of this new type of loan. This may be because the very people who take advantage of the pay day loans are the same ones that are denied the traditional loans by banks and finance companies. The criticism on the other hand comes from the debt counselors who worry that repaying a pay day loan will only add to Great Britain's debt issues and the banks and finance companies that are its competition.
One of the reasons that there is this criticism is that this new industry is unregulated while the banks and finance companies are. The debt counseling services are worried that without regulation the pay day lenders will take advantage of those least able to repay them. The instant loans industry and lenders like Bonza Payday.com.au denies this and argues that it is offering a much needed service to a neglected segment of the market. If the response of the general public is any indication then the pay day loan industry is right. They are an example of a changing industry for a changing society where the least of consumers have the same rights to a loan as the wealthiest.
A pay day loan is usually an amount between 100 and 1500 pounds loaned for a term of several days to 30 days at the most. The term is determined by when the borrowers next pay day is. If I borrow 500 pounds today and I get paid in 2 weeks that is when my loan and finance charge is due. If I borrow that same 500 pounds and I get paid in 3 days then it will be due for repayment in 3 days. Both borrowers would pay 25 pounds per 100 borrowed for a finance charge of 125 pounds. The only difference is that one would have the money for 2 weeks and the other for only 3 days and pay the same for it. That is just about the opposite of the traditional loan industry where you pay more if you have the loan longer.