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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
- Bad Credit Loan Information
- IVA Information
- Debt Management Information
- Logbook Loan Information
- Consolidation Loan Information
- Unsecured Loan Information
- Secured Loan Information
- Car Loan Information
- Business Loan Information
- Guarantor Loan Information
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
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.
BAD CREDIT LOANS
What is a Bad Credit Loan?
A bad credit loan steps in where a regular loan may have been refused to you. If you have ever taken out a loan in the past, or a credit card, you will have a credit score. So, if you have had trouble with payments in the past, your credit score will be low. That means it is harder for you to be considered by loan providers - you are high-risk to them.
Sometimes known as Bad Credit History Loans, these are specifically designed for people who have had problems with their credit rating and been turned away by regular lenders. There are many available, although in the last year or so these have declined somewhat, as banks have been less interested in high-risk borrowing. However, a good broker will be able to find you the loan you want.
How Can I be Accepted?
This is the easy part: via a bad credit loan broker, you enter your requirements and allow them to do the legwork. They will search the loan marketplace on your behalf and will almost certainly find you the loan you need. So whether you're after a personal loan or a secured loan, mortgage or even credit card, you will most likely find something to suit you. If you are good with repayments, you may even be able to build up your credit rating.
What is the Risk?
As with any type of borrowing, there is a risk involved in a bad credit loan. Because you are a higher risk to the lender, the interest may be higher than normal - and therefore the repayments are higher. You will need to make sure you can cover repayments. Some bad credit loans are secured against your car or house - for example, say you need the cash to pay for a new car. The loan lender may use that car as collateral against the loan, so if you fail to meet repayments, your car may be seized. If it is your home at stake, you stand to lose a great deal - and could end up with an even worse credit rating.
IVAs
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.
DEBT MANAGEMENT
What is Debt Management?
Debt management is offered by qualified insolvency practitioners and expert debt advice companies. When a person falls into debts which are unmanageable – for example, there might be two or more creditors asking for money – a debt management company can help that person find a solution. They might do this by carrying out a means test, so that they can find out how much you can actually afford to be paying back on a monthly basis. This is especially useful for people whose financial circumstances have changed due to a job loss or pay cut.
Once a debt management company has looked a person’s individual case and circumstances, they can work out a debt plan. This might involve freezing interest and gathering debts into one affordable monthly repayment. In addition, they may negotiate with that person’s creditors on their behalf.
Who can get a Debt Plan?
You can get a plan if you have around £1,000 or more in debts. Make sure you check what the minimum debt requirement is from a debt management company – they may ask that you have more than £1,000 in debts. In addition, you might need to prove that you have more than two creditors. There may be other requirements such as age/employment, but this will be explained to you in detail by a debt management company. The initial application is generally straightforward and can be done online.
What are the Benefits of Debt Management?
Seeking debt management from a qualified company is a great first step to a debt-free future. Rather than ‘sticking your head in the sand’ and ignoring the problem of severe debts, you are looking for a way out – this is always a positive step! A debt plan is a great alternative to an IVA and you do not need to be in as much debt as an IVA requires you to be.
The fact that your creditors are negotiated with by a professional acting on your behalf is a great advantage, as is the possibility of interest being frozen. However, it is important to remember that your overall debts will not go down/go away from a debt plan.
LOGBOOK LOANS
Logbook Loans are often put under the same umbrella as Payday loans, and indeed the two loan types are similar.
How are Logbook Loans Similar to Payday Loans?
Both loans are aimed at you if you have had problems with:
- Poor credit rating
- CCJs
- Arrears
You are more likely to be accepted on a Logbook or Payday loan than, say, a normal Secured or Unsecured loan. Both Logbook and Payday loans provide the borrower with funds quickly, and are best paid off as soon as possible.
What is the Difference between Logbook and Payday Loans?
So far we have compared the two loan types. But there are a couple of main differences: Unlike Payday loans, Logbook loans are secured against your car. That means they are actually a secured loan, but instead of being secured against a large asset such as your home, here it is your car that is used. So, if you are unable to meet repayments on a Logbook loans, you risk losing your car.
Logbook loans generally have slightly better rates than Payday loans, because there is less risk for the lender. They know that if you fail to meet repayments, they can take your car. The APR rate will still be pretty high so the earlier you pay off the loan, the better.
Logbook loan lenders will not carry out credit checks so if you have had problems being accepted elsewhere, you are likely to be accepted for a Logbook loan. As with any loan, make sure you are aware of the risks you are taking on when borrowing money. Ask yourself: Can you afford to borrow? Will you be able to meet repayments or will this add to your debts? If you are ever unsure, seek independent financial advice.
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.
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.
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.
CAR LOANS
For a large number of people, deciding to buy a car is one of the biggest decisions – and purchases – that they will ever make in their lifetime. Whether you are looking for a brand new or used car, prices can vary greatly. Aside from the purchase price are other costs to consider, including tax and insurance.
There are various ways of financing a car, including:
'Cash' purchase
A cash purchase means any payment that takes place in one go. It doesn't mean you have to pay in cash (notes and coins). Make sure you check that all the paperwork is genuine and above board before you hand over any money.
Hire purchase
Lots of dealers offer their own arrangements, most commonly the Hire Purchase (HP). Another form of dealer arrangement is the Personal Contract Plan (PCP). They are types of loans, and will carry an APR rate – make sure you take into account fees and charges as well as the rate when you work out if this option is worthwhile.
Car Loan, other personal loan or Credit Card
You can get a range of loans and credit cards these days, to help pay for a significant purchase such as a car. Today, you can tailor your loan search by getting a Car Loan from a specialist provider. There are many available who offer an easy online application process and they usually cater for people regardless of credit history.
What is a Car Loan?
Unlike a hire purchase where the car company technically owns your car until your final instalment has been paid off, a specialist Car Loan can give you the chance to buy your car outright and pay back the loan over time.
Car Loans are provided by companies who offer a quick, user-friendly service. Generally, you can apply online and are rarely turned down. In fact, most specialist car loan providers highlight that they are willing to take on customers regardless of their credit history. This makes them especially appealing to people who have been turned down elsewhere.
Who is Eligible for a Car Loan?
Most car loan companies ask for your driving licence, passport, proof of address and they might ask for a few bank statements. They might ask that you are at least 21 years of age. A credit check might be carried out and this could affect the amount that a customer is then offered – but a poor credit history won't necessarily mean that an applicant is turned down. In many cases, even self-employed people will be able to get a car loan.
Do Car Loan Companies Sell Cars?
Rarely. Unlike a hire purchase deal from a car dealer, car loan providers are purely providing a financial service – they are not selling cars.
BUSINESS LOANS
What is a Business Loan?
Whether you are a limited company or sole trader partnership company, you can find a range of loans which you can use for whichever business requirements you have – whether you are starting a new enterprise and need a kick start or if you need a long-term boost.
You can get a business loan from mainstream banks and lenders or from one of many independent lenders. The best way to go about finding one to suit you and your business is by taking some time to shop around. You can find flexible cash advances, fixed rate loans and start up finance. Choosing the right one is much like choosing a personal or home loan – compare rates, terms and loan period and consider how much you can afford to borrow before selecting a loan provider.
What are the Terms?
The terms set out for a business loans vary greatly depending on the lender and the size of the loan. Some lenders require applicants to run a business with an annual turnover that is up to £25 million while other companies ask for much less (£3,500 a month is normal). You might need to prove your business credentials and provide the lender with merchant credit/debit statements.
When you are looking for a business loan, look at what is asked on the application form to avoid disappointment.
What is the Loan Amount?
Again, this varies hugely – you can get loans of between £1,000 and £25,000 and others which allow you to borrow up to £1 million and beyond. Note that depending on the size of your loan, your loan might be secured against a property – so bear in mind that you risk having that property repossessed if you do not keep up with repayments.
GUARANTOR LOANS
A 'low credit' loan, the guarantor loan is aimed at people who have problems getting a mainstream loan due to having a poor credit rating, CCJs, defaults, ex-bankrupt and all reasons that make normal lenders turn your application down.
Guarantor loans are personal loans and allow the borrower to nominate a guarantor. This person steps in if you suddenly find yourself having problems with your repayments. That guarantor takes on a responsible position – because if they are required to step in, they take over the responsibility of the loan and repayments.
What about my Credit Rating?
Because you have a guarantor who is there as a security, guarantor loan borrowers are not required to have an excellent credit history. However, the guarantor will – they need to have an outstanding credit rating and if they are required to step in on your behalf, they will take over the entire responsibility of the loan. This means if they land in trouble with meeting repayments, their credit rating will be adversely affected. Therefore, make sure you choose someone who is willing to take on that risk.
How Much can I Borrow?
Most guarantor loans offer up to £3,000 but have a look around to compare what is on offer – some might offer more.
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