There comes a time when most of us have had financial difficulties, and have had to find money in an emergency. Despite the urgency of the situation, it’s more important than ever to find a lender who you can trust.  So, what should you be looking for?

When borrowing money, you should always check that your lender is registered and approved by the FCA.  This can easily be done online by consulting the regulator’s register of companies approved to offer financial services.  Not only will they follow the FCA’s Code of Practice but you will also be protected by the FSO (Financial Services Ombudsman) if you’re dissatisfied by your treatment after you make a complaint.

You should check whether they have their own Code of Practice about borrowers who default on their loan.  You never know what tomorrow may bring and circumstances may prevent you from paying back the loan on the date(s) that you’d agreed.  When you’re in a dire financial situation, you want a lender who will show forbearance and try to reach an affordable repayment plan with you.

After the abuses of the turn of the century by some payday loan companies, the whole idea of payday loans was treated with disdain by the popular press.  They hadn’t seemed to realise that these loans could be a lifesaver for some people when they needed cash urgently.

Set up in 2011, the creation of Western Circle was a watershed in how payday loan companies should be run.  Its founder realised that a lender which acted ethically could provide a valuable financial service without exploiting its customers.  In only a few years, the whole payday loans industry was further revolutionised by the FCA taking over regulation from the OFT (Office of Fair Trading), and a number of more rigorous rules were put into effect regarding key areas such as the refinancing of loans and how much interest could be charged.  A direct result of these regulatory changes was that exploitative payday firms didn’t apply for an FCA licence and left the market.

Cashfloat direct lender (which is the trading name of Western Circle) was able to increase their market share and also expand the financial products they offer.  Apart from offering instant payday loans, they also provide short-term loans of £200-£1,100 which can be paid off in 1-4 monthly instalments depending on the sum borrowed and the affordability.  Responsible lending is the cornerstone of how Cashfloat operates, and so all borrowers have to undergo a credit check with one of the UK’s credit reference agencies.  However, the company stresses the importance of affordability and are quite willing to lend to people who have a bad credit score as long as they pass an affordability check and meet the company’s eligibility criteria.  They must be UK residents with a UK bank account, be at least 18 years old and have to be recipients of a regular income.  The online application for any loan from Cashfloat requires no application fees.