Transfer Fee Cost for Same Day Loans

Transfer Fee Cost for Same Day Loans

It became a legal requirement in January 2012 for banking processing times to meet new EU standards. You may remember BACS transfers that could take several days to clear in your personal banking, but when someone sends money to you today it usually takes just a few hours (including weekends). This is due the Faster Payments Service becoming the industry standard. There is no extra charge via personal banking, but when a business uses this system there are costs involved, that is why loan providers tend to add on a charge of £5. This legal ruling was a massive boost for the payday loan industry that quickly evolved to this change.

Previously for same day loans online you would have had to select a CHAPS transfer and these can cost up to £30. These offer guaranteed clearance with higher limits and so they are still used for high margin payments for instance in legal or property transactions. It doesn’t make much sense to use them for online lending due to their high price and the added efficiency of the Faster Payments Service (FPS). When you visit some payday lenders you do tend to see an option provided for slow funding. I’m not entirely sure how these companies get around doing this. For internet payments there is now a deadline by the next business day that would rule out BACS.

Either way, slow funding on the whole has become a thing of the past. Same day loans are now available extensively across the market. Wonga was one of the first lenders to take advantage of the Faster Payments Service system. They charge £5.50 for transmissions, but as a new customer you can remove this with a Wonga Code. Lenders like QuickQuid and Sunny provide free FPS transfers. Across the wider market, between £5 and £6 is the likely required price tag. Cash Genie and WageDayAdvance are two popular lenders that charge excessive fees. Whether these are CHAPS or just overpriced charges is unclear, but I personally wouldn’t pay more than £6.

Using someone that charges up to £30 for the transmission fee is obviously going to make them a very expensive company to use. Most set similar interest rates that work out on average at around 1% per day, but this goes out of the window with such transfer fees on top. It is worth adding the reminder that although some lenders may automate payments, most companies will have to approve any funds to be sent. They may open during typical business hours only and be closed over the weekend and so if speed is important then you do need to focus on Lenders Open 7/7 Days.