LOANS AND IVA DEBT MANAGEMENT
Whichwaytopay compares at least 10 of the top companies and brokers offering PayDay and Debt Consolidation Loans. Each loan is rated in a number of different categories to give a clear display of each loan's attributes so that, when you choose a loan by using Whichwaytopay, you make an informed decision.
As an independent company, our reviews are totally unbiased so that you get nothing but reliable and frank information.
You can compare all Loan cards side by side.
- Payday Loan Information
- Consolidation Loan Information
- Unsecured Loan Information
- Secured Loan Information
- IVA and Debt Management
PAYDAY LOANS
A payday loan, otherwise known as a fast or easy loan is a short term loan or cash advance that is generally used by individuals who need some money prior to when they get paid at work.
Unlike traditional bank loans, these can be for small amounts, although they should usually be paid back within a month. SO if you're really in need of some cash to pay a bill or unexpectedly need to pay for something such as a car repair or a dental emergency.
These loans can be applied for directly online and you will receive instant notification of approval.
To receive a loan, you generally need to have the following:
- Be over 18
- Be a UK citizen
- Be employed
- Have a valid bank account
Click here to view our comparison table that lists all Payday Loans.
What are they & how do they work?
Sometimes the unexpected can happen, and you need cash quickly; payday loans offer short term cash to 'tide you over' to payday. They are based on a personal check which will be cashed in the future or by electronic access to your bank account on a certain date. As a borrower you write a personal check for the amount you wish to borrow PLUS the charge for the loan (called a finance charge) and then receive the loan amount in cash. Or, if you choose the electronic option, you sign over access to your bank account to receive and subsequently repay the loan.
The lender holds the check up to the next payday, when you must pay the total amount. The lender will then either cash the check, or you can redeem the cheque by paying the full amount in cash. You may also just pay the finance charge to roll over the loan to next month's payday.
Payday Loan Terms
Payday loan terms will vary from provider to provider. Generally speaking the loan term is about two weeks, and as a short term loan they tend to have higher APRs. They are not there to offer a value for money loan, simply a way to get through a tricky period.
Can anyone get a Payday loan?
Lenders don't carry out a full credit check, but in order to qualify for a payday loan, you need an open bank account in relatively good standing, regular income, and identification (i.e. Passport or driving licence.)
Where can I get a payday loan?
Payday loan shops, check cashers and pawn shops all offer this kind of short term loans, there are online companies too.
Are there risks?
Short term, high interest loans can trap some vulnerable people into ever escalating borrowing cycles. So it's best to be careful when thinking about a payday loan, and whether you will be able to handle the repayment. For instance, if the lender cashes a check and it bounces, you will incur a bank charge AND a charge from the lender, a cycle which can easily spiral out of control.
CONSOLIDATION LOANS
A Consolidation loan is basically a loan to pay all of your existing debts, so that instead of several payments to different companies, you combine your debts into one lower monthly payment, over a longer length of time. You will still owe the same total amount, but by simplifying your finances your debt should be more easily managed.
Would I benefit from a consolidation loan?
Consolidation loans are most helpful if you are finding it hard to manage a number of different debts, as it means you only have one to deal with. The lower monthly payments can also take the strain off, leaving you more money each month. Many consolidation loans also have payment protection schemes, so you are covered in the case of accident, sickness or unemployment. It's best to ask when you apply.
Students and consolidation loans
Students may benefit from consolidation loans, as many graduate with multiple debts. By consolidating these debts, it can be easier to get yourself on your feet post graduation, and work towards a better credit situation.
What should I look out for?
If you're thinking about taking out a consolidation loan, the best idea is to look around carefully before committing yourself. Consider how much interest you're paying on your current debts, and see if it's worthwhile consolidating as the interest tends to be higher.
Are there risks?
The main thing is to remember that the debt hasn't reduced or disappeared. Paying off multiple debts with a consolidation loan may create the illusion that you've solved the problem, but you is trap and remember mustn't fall into this trap, remember you still owe at least the same amount. Also bear in mind that your spending habits may have been what created the problem in the first place, make sure you don't get too comfortable and relapse!
Can anyone apply for a consolidation loan?
It depends on the lender, but generally speaking if you are a homeowner with equity, then you should be eligible for a loan, even if you have bad credit, although most lenders require a minimum balance before they will consolidate your loans.
How do I apply for one?
There are many specialist online companies that deal in consolidation loans.
Check out Consolidation Loan options
UNSECURED LOANS
Despite its name, an Unsecured Loan (also known as a personal loan) is in fact a safer loan for the borrower than a Secured loan. This is because the borrower does not need to put up a significant asset such as their home to secure the loan. Generally whether or not your loan is approved is decided by your credit rating. There are a number of companies that will loan you money even if you have a poor credit rating – though generally you will find that the APR will be higher if you have a poor credit history.
Click here to view our comparison table that lists all Unsecured Loans.
SECURED LOANS
A secured loan is effectively a loan which is 'secured' on the basis of a significant asset – usually a home. What this means is that if the applicant owns his home or at least a portion of it; he can receive a large loan against this asset.
What are the benefits?
As the borrower has put up a significant asset as collateral against the loan, the lender considers the loan to be less of a risk and so is more likely to lend a large amount. As there is less risk to the lender, then it is usually quite easy top obtain the loan needed (dependant on the value of the asset of course.)
What are the risks?
The loan is riskier for the borrower than an unsecured or personal loan; as if you fail to make your repayments, you run the risk of losing your property. If you want to borrow a loan of EG £1,000 to £25,000 you may want to try an unsecured loan first.
Please remember: THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR LOAN.
Click here to view our comparison table that lists all Secured Loans.
IVA AND DEBT MANAGEMENT
What is an IVA?
An IVA is short for an Individual Voluntary Arrangement, and was introduced by the government in 1986. In short it is an agreement which is reached between an individual who is struggling with excessive debts and his or her creditors. The agreement is generally that the individual promises to pay a manageable monthly amount for a set period (usually 5 years) which goes some way towards paying back the total debts. Basically it is a last resort to avoid bankruptcy, and the creditors will at least be sure to receive a certain amount of their money back. At the end of the agreed period and if the payments are made, the individual will be declared debt free.
What are the benefits of an IVA?
It is preferable to becoming bankrupt and even if you are already subject to a bankruptcy order; if you are accepted onto an IVA, your bankruptcy will be annulled. The interest rates on your debts will also be frozen, and payment can be made in one monthly transaction.
How Do I Qualify for an IVA?
You will need to owe more than £15,000 and generally have at least 3, 4 or more total creditors. You will also have to be in full time employment.
Click here to view our IVA and Debt Management Services.