Looking for The Money Shop alternatives? Here are the solutions to your financial crisis.
You have looked at your finances, and you’ve realized you urgently need cash for a short period. You may know several lenders, but you have not yet decided due to the weight of customer complaints, which has led to the closure of big players such as the money shop and the risk of getting trapped into a debt cycle.
This article provides insights into the risks involved in payday borrowing and lending and advises on healthier borrowing habits.
Why did The Money Shop close its trades?
The Financial Conduct Authority found out that payday lenders were breaching their own rules on short term loans. The entire lending process has been the reason for its failure. Let’s begin from issues such as loan application, its smooth and fast. Thus, the industry is built on marketing strength, which creates demand by selling people a loan need; this is how they push their products.
It led to fatal results on both the money shop lenders and its borrowers. For example, giving customers bigger loans which, they cannot afford to pay or providing multiple payday loans at the same time is a confirmation that the loans given were destructive, addictive, unwanted and unneeded.
How can you protect yourself from this predatory system?
For a system to be beneficial, you have to understand factual information to avoid wasting time and getting confused in the process. Here is what you need to know:
How much? Is it justifiable? Why and when do you need it? With the answers, you should compare lenders who fall within your limit.
Now that you have established the amount determine how long you want to pay the loan. Look for providers that offer low interest for your loan term. The best credits are those you pay quickly, and the best lender deals are those that include early repayment option, without fees.
Look for additional charges
Loans with additional charges may be more expensive than those with higher APRs. Therefore, you need to assess lenders and evaluate if the figures make sense. Common fees include:
- Rollover fees
- Late payment
- Bank fees
- A Prepaid debit card fee
- Returned check fees
Alternatives loans to The Money Shop
Making a rash decision without checking all the available options end up to be expensive in the long run and puts the borrower at the risk of the debt cycle. Consider the below alternative:
If you are behind a payment or facing financial problems, its best to approach your bill providers to request for an extension on the due date or more extended payment plans.
Non-profits, local charities and government agencies often provide free essential financial services such as with food, rent and utilities.
It is among the quickest ways to add to your income, consider looking for food delivery as your part-time job. There are other ways to generate income quickly; sell some of your belongings such as clothes you no longer need to online stores.
Borrow your family and friends
The same way you share the good news with those close to you, do the same when you hit a bump. It is the least expensive and fastest solution to dig yourself out of trouble. This option has more generous timeframe and lower/no interest rate.
Seek credit counselling
Many consumers have over-spending habits on credit cards which leads to the financial crisis. Credit counsellors help with debt management plans by looking for ways to help borrowers reduce interest rates on credit cards. The free up money goes to things like utilities and auto repairs.
The other alternatives may also have better terms such as less interest on the loan, less complicated application procedures, and more extended repayment periods
All money lending are scrutinized before they are permitted to start their business to ensure they meet the entire requirement before they are trusted to handle clients responsibly and ethically.
FCA takes action against firms that exploit the clients. When choosing a short-term loan in any money lending firm in the UK, ensure they are FCA signatories.
Most payday lenders do not check credit ratings as they highly rely on proof of income. However, other providers access the current financial situation and growth. Thus, even with bad credit, most lenders would still provide loans upon signing a repayment agreement.
- They are designed for short-term solutions to cash flow problems.
- Have higher rates and fees.
- They do not always check applicants credit history.
- They provide smaller unsecured loans amount.
Loan providers get in contact with employers for a few reasons: to confirm employment status and income amount. If you provide enough documentation during the application, your lender may not have to contact your boss — however, it’s not the case for every lender.
Payday loans are helpful during emergencies or at right circumstances. The availability of many options means doing a thorough check to access alternatives that you will meet the terms, and that suits your lifestyle and budget. If you aren’t sure on your ability to repay, consider getting help from credit consultancy agencies or local charities.