Types of Charges to Avoid while Applying for Payday Installment Loans

Payday installment loans are offered by private lenders. These are mostly independent firms and they do not have any association with banks and other major financial institutions. The unsecured short term loans are available for residents of the United Kingdom. The eligibility criteria are usually quite lenient, such as a local address, valid contact details including email and phone, a bank account and proof of income. The income could be a salary or profit through business and self-employment. Anyone in need of such a loan can apply for free without paying any charges whatsoever. However, there are some lenders and facilitators that charge a fee.

• There are a few common types of charges levied by brokers and lenders. A facilitator or aggregator may charge a brokerage fee. This is similar to a commission. It could be a fixed fee or a certain percentage of the loan amount. You should check if an aggregator, facilitator or broker is charging such a fee. There are aggregators that do not charge any money to facilitate the application and subsequent approval of payday installment loans. Hence, you should avoid all aggregators that charge a commission.

• Lenders can charge a fee as well. This could be a processing fee. It can be a fixed sum or a percentage of the loan amount you apply for. Such a processing fee may be deducted from the loan amount and the rest may get disbursed and subsequently credited into your bank account. Some lenders charge an upfront fee to process the application. Such upfront costs should also be avoided. As a borrower, you should not pay any money to an agent or a lender to get your loan processed or approved.

Always find out if you are obligated to pay anything, upfront or at the time of loan disbursal. Avoid such aggregators and lenders of payday installment loans.