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Payday Loans no credit check

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Payday Loans are loans that you can acquire no matter what your credit rating might be, and they are useful in times when you may need a relatively small amount of money (less than £1000) which you are able to pay back over a relatively short amount of time.

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Lending money, not lending a hand: Loan companies make the situation worse for consumers in the unsecured loans market

In an already difficult market, there are some people who are struggling to keep up repayments on their payday loans with bad credit. Now, it has been revealed that some banks and loan companies have been adding small percentage points onto the average interest rates of a loan, making repayments more challenging and breaking even a long way off.

One financial expert called this interest rate hikes an 'under the table' approach to getting more money. Some banks and loan companies have received more criticism than others as the percentage amount by which interest rates have increased varies between institutions.

USwitch.com studies have revealed that the average headline interest rate for an unsecured personal loan is above nine percent for the first time at 9.07%, which is an increase of 8.74% from this time last year.

Some banks, loan companies and even consumers have written off this increase because it looks rather miniscule. However, calculations have indicated how much the rise of 0.33% could have an adverse effect on how much more a consumer pays in interest towards their unsecured personal loan.

Currently, a payday loan online of around £20,000 could be expected to fetch £1,940 in interest for the consumer to pay to the financial institution they borrowed money for in the first place. Resultantly, the amount of money payable back to the loan company is £21,940.

Interestingly, the payable amount with the above new interest rate is a lot more significant than it would have been without the sneaky increases in loan interest rates - £192 less, in fact.

These sneaky increases in charges from financial institutions come without reason and against all odds. With the interest rate of 0.5% from the Bank of England remaining that way for the next month at least and with people already struggling to keep up with loan repayments, some people are asking why banks and loan companies are being so tactless and are making things practically impossible for customers.

Louise Bond is one of those people. A personal finance expert from USwitch.com, the comparison website that found out some of these shocking details, she added this: "Much as we understand that the banks are struggling, these are big hikes to swallow. With all eyes on mortgages and savings, it seems loan providers are slipping under the radar slightly.'

Many banks have now engaged in this practice of increasing interest rates marginally – usually, when one big bank does it and gets away with it, the others follow suit in a very quick fashion.

It is understood that some of the most well-known banks that have been caught hiking up loan headline interest rates in this latest report include the troubled Bradford and Bingley and Co-operative bank.

Even though to some these percentage increases seem small, there is a large potential for the profit from these interest rates to gather up and build momentum. With more than 1.3 million who have unsecured personal loans, those little £192 added on to £20,000 could soon add up for profit-deprived banks and loan companies.

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