Are same day loans safe?
We often get asked the question “are same day loans safe?” and the answer is yes if they are taken out responsibly. Online same day loans are also known as payday loans or short term loans. With any short term loan with high APR there is always some risk involved. The most important aspect is that you look at the repayment amount and you know that you can afford it.
Not being able to afford the repayments and missing them altogether can cause serious damage to your credit score. Having a bad credit score could lead to you getting higher APRs than before and also in some cases being refused credit altogether.
Due to the nature of these loans, the APR is high because you are paying the loan back over a short period of time. After a recent FCA regulation update though, loans are now capped so only a certain amount of interest can be paid per day. This means that you will never pay back double the amount that you borrowed.
- Lenders can only charge 0.8% per day, so that means if you borrow £100, you’ll pay 80p interest per day. (£100 loan over 30 days would = £124 in total to repay back and £24 would be the interest)
- Lenders use to charge a lot for miss-repayments, however, that has now changed and they can’t charge more than £15 if you pay late.
- As mentioned above, you’ll never pay back more pay back more than double what you borrowed. So if you borrow £100, you legally can’t pay back £200 or more due to interest and late charges.
Can I get a same day loan with no credit check?
Another question that comes up a lot, the answer is no, no lender can offer a same-day loan with no credit check. This isn’t safe or responsible lending. If lenders didn’t do credit check then they would be putting themselves at risk. Credit is there to help lenders make accurate decisions on who they borrow to, so they’ll always need to do a credit check.
Things to look out for to make sure your same day loan is safe
- The website you use – have you used an online website that is high in the Google search and not on page 10?
- FCA approved – Does the website you are using for your same-day loan mention that they are FCA approved? If not, are they registered on the FCA register? Only use FCA-registered companies like Sunny Loans UK.
3. Has the company emailed you or called you asking you to take a loan out? This is a big red flag and you should only take a loan out when you need to take a loan out and not be pressured into one.
4. Has the company asked for money upfront? If yes, this is a scam. Unfortunately, a lot of legitimate loan companies get cloned by fraudsters and these fraud companies ask for money upfront. Never give any money upfront when applying for a loan.
5. Are they charging really high-interest rates? Remember, lenders can only charge a certain amount and you can’t pay back double what you borrowed.
6. If you are using broker make sure they are free to use – most brokers like Sunny Loans UKare 100% free and will make money from the lenders, not the customer. However, there might still be some brokers who do still charge a fee so always use a free one.
Most same loans are safe but please make sure you do a few checks first. Make sure the company is FCA approved before applying. Here at Sunny Loans UK, we specialise in helping customers get same-day loans safely. If you do need to apply for a same-day loan you can do so by following the APPLY NOW button below.