New regulations for the payday loan industry are helping customers find great deals on loans. According to Sky News, lenders are being forced to prominently display links to websites that show how they stack up to other lender’s. They are required to link only to sites on which their company’s loans are compared to the competition.
This is meant to give consumers more choices and make them aware of how each company compares so that they can get the best deal. Lenders are already scrambling to put these new changes into effect, and it is having massive impact on the industry.
Now, lenders have to be aware of how they compare to other lenders in their area. They are having to change their prices to appear more competitive and modify the way they do business in a changing industry. This comes on the heels of price cap changes and other modifications to the regulations that govern the industry, primarily imposed by the FCA (Financial Consumer Authority). According to the Competition and Markets Authority (CMA) that monitors the payday lending industry and other financial markets, this new legislation can save consumers, on average, about £60 a year. That can add up to some incredible savings, epically for those who take out multiple loans year as a way to get by.
Payday loans have come under some scrutiny over the last few years for operating in ways that are not consumer friendly, and these new regulations can ensure that consumers are not taken advantage of. Overwatch committees like the FCA and CMA have noted that the reason many people fall into debt after applying for payday loans is because they are not aware of their options. They believe falsely that they are only eligible for certain types of loans because of their credit history or because of what a lender has told them. They may think they are getting a good deal, but then find out later that the loan costs far more than they realized.
Unscrupulous business practices within the industry is something that the FCA has been working to eliminate since it started targeting the industry, and it has made great efforts to make these payday loans a lot friendlier for consumers. This new set of regulations only furthers their goal of cleaning up the industry, and consumers have been pleasantly surprised with the advances in payday loans over the past few years. However, there have also been numerous complaints about lenders that offer these types of loans, and it goes to show that there is still a lot of work to be done. This is a step that should help consumers save money and find the best deals possible, making them aware of their many lending options. At the same time, it should help loans to become more affordable, as lenders now has to compete more directly with one another, and that can only be beneficial for the customers.