Easy Applying for Receive $1000 Money. 99% Approved. Funds Transferred within 1 Hour. Go Now. Although they originated in the United States, it may come as a surprise that payday loans are not strictly an American phenomenon. In fact, several countries around the world have a thriving payday loan market. One country included in this list is our tea drinking friends across the pond. While relatively new there, the U.S. has seen a sharp increase in the amount of lenders operating, with the amount of loans currently being withdrawn at four times the number it was in 2006.
In fact, these businesses make up about 20% of the total revenues acquired from the loan industry. Needless to say, the payday loan industry is going strong in the U.S., and while their system is based on similar practices in the United States, there are many important differences in the rules and regulations that govern these businesses in each country.
The loan business in the United Kingdom is relatively free of the confines experienced by lenders in the United States. In particular, whereas in the US there have been several laws passed at the state level restricting the annual percentage rates that payday loan lenders can charge, the Us has no such regulations, and lenders may charge as high of an APR as they choose. The only restriction is that lenders must have the APR clearly stated in advertisements and on loan application documents. However, this practice has not alleviated criticisms of these businesses, as critics claim that customers typically do not understand these numbers and are therefore still being manipulated into taking out loans they normally would not.
Another difference in loan practices is that the United States has seen recent regulations governing who can withdraw a payday loan and where these loans may be taken out. Several states have either regulated businesses to the point that they can no longer operate, or have outright banned them completely. Additionally, new legislation has been passed restricting such loans for military personnel. In contrast, the US has not passed any laws of this sort, allowing for any qualified individual to withdraw a loan at whatever annual percentage rate the lender chooses to charge.
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Despite these differences, they are also many similarities in the way payday loan businesses operate in both America and Britain. This is unsurprising, as lenders in the United Kingdom have undoubtedly been inspired by the business models employed in the States, where these types of loans originated. As in the US, where you must be an American citizen in order to take out a loan, the UK requires that you are a citizen of England, Northern Ireland, Wales or Scotland if you wish to take advantage of these services.
Likewise, both countries require that you are employed full time and are at least 18 years old. While in the US you are typically required to have been employed at the same company for six months, this is not a requirement in the UK. However, British citizens wishing to take out a loan must have a banking account that is at least six months old.