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Why do Lenders have to use Price Comparison Websites

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Why do Lenders have to use Price Comparison Websites?

 

Who?

The Competition and Markets Authority (CMA) performed an in-depth 20-month long investigation into the Payday Loan Industry and decided that all Payday Lenders must be present on at least one Price Comparison Website (PCW).

Why?

Well the answer is relatively straightforward, Borrowers typically do not shop around and perform sufficient research if they have to visit each Payday Lender that they are interested in and review and recall their details to compare to another company. As you can imagine, it is very time-consuming given the sheer amount of competition among the many Lenders and another reason is that it isn’t easy: one Short Term Loan Lender may promote their low Representative APR but exclude certain Administration costs while another Payday Loan Lender may show the whole fee but work out cheaper overall. It can get quite confusing! 

What?

The solution, according to the CMA, was to demand that all Short Term Loan Lenders feature on a Price Comparison Website so that it is far easier for a Borrower to review the different aspects of loans offered by the Lenders in one place. In doing so, the CMA expects a saving of around £60 per year for Borrowers who use the PCW’s. This is a significant amount and can make a lot of difference to many on tight budgets. 

We agree!

Naturally, we agree! As one of the UK’s Leading Payday Loan Price Comparison Websites, Lenderseekers.co.uk aims to bring all the best Lenders into one location with a set of easy-to-use Filters to ensure that Borrowers can find the very best value same day loan for their particular needs. Indeed, we offer the most comprehensive set of Filters of any PCW! The advantage is that Borrowers get to make their choice based upon exactly what they need from a loan. Of course, not all Filters need to be used; they are there only to offer a greater choice, not take up more valuable time. 

Convenience

Why do people use Payday Loans in the first place? The CMA’s investigation revealed that 60% of Borrowers did so out of convenience. The near instantaneous access to cash is very appealing; the Instant Payday Loan trumps the time it often takes to apply and receive credit from Banks and other Financial Institutions.

Loans like Wonga

So the bottom line is that Borrowers want the niche that Payday Loan Direct Lenders fill due to how they can provide quick access to cash and loans. For all of the reasons outlined above, it is prudent for the CMA to have made their call for Payday Lenders to be shown on PCW’s; the Consumer Credit Market is all the better for it and it levels the playing field for Borrowers who can now decide between the well-known Lenders, like Wonga, and some of the smaller Lenders who also offer a great service.