A freedom of information request has sparked speculation that the quick loan industry will die out by 2023, as it’s revealed that the industry has shrunk year-on-year by 37%.

The information provided by the industry's governing body, the FCA, also reveals that the number of payday lenders is decreasing, with the amount of emergency lenders operating within the UK having fallen by 31% since last year.

Market Trends
Experts like the website Simple Payday take the view that the data represents market trends, the ripples of which - from tightening regulations, continue to be felt.

“If the tightening of procedures never came into effect, large lenders like Wonga wouldn’t of faced the level of refunds they did, and wouldn’t have gone bankrupt.” Said Simple Payday.

The large swathe of payday lenders going out of business would indicate a decline. But an industry change could just as well be on the cards, as new lenders and models move into the market.

With this in mind, the prediction of new ‘payday styled’ lenders now entering the market seems to be contrary to natural science. This is the same industry they now operate in and are predicting eradication of by 2023. It would seem, disingenuous at best and cunning more than likely.

The Numbers
The figures recorded by the FCA say that borrowers in the UK took out 807,723 emergency payday loans in the last/third quarter of 2019. This is down from last year when the number was recorded as 1.3 million payday loans taken out in the same quarter of 2018.

Detractors would wish to point to this as a smartening of mindset and borrowing habits, but in fact is a combination of market factors.

New Regulation and New Models
These have brought large payday lenders into administration. Through large fines and refunds being issued on previous loans. As well as new caps on loans. The old payday loan model and companies have slowly been replaced over the last couple of years by newer companies and slightly different terms. Like longer repayments and more cash being offered. The industry hasn’t so much declined, as changed shape. The large lenders haven’t quite abandoned ship and you can be sure that the money behind some of the larger lenders now in the news as going bankrupt will reappear in shiny new suits and shiny new customer-orientated websites.

The numbers do however appear to be going down. Prior to this year the number of cash loans were on the rise. But since the start of 2019 those numbers have dropped. 32% in the first quarter, then 34% in the second quarter, pointing to market change.
This number is ratified by the number of payday lenders also slumping. In 2018 the UK housed an impressive eighty eight payday lenders. Today that number stands at sixty one companies offering emergency loans.

It is this data detractors have latched onto and extrapolated into quantum physician terms, predicting that if the trend were to repeat continuously each quarter hereon in - to be the end of payday loans sector. Of course this would be logical. But just another one logical step ahead is also the idea of the money now leaving also re-entering quietly after, wearing a new dress and name badge, with no fines or refunds now owed.

The world has seen an increase in social justice warriors, the payday loan industry is no different. Peter Briffett is just one of them. Hearing himself in an echo-chamber of his champagne socialist friends - deriding the industry and talking of stamping lenders out of business, all the while cunningly ignoring the fact their product is almost identical.

In a worrying state of the times, these people are given a platform to labast the very business model they hope to emulate.

What is an Emergency Loan?
Cash advances are offered to those fulfilling the criteria set out by payday lenders. Normally very basic details are needed to secure credit, but borrowers are faced with larger interest fees than other types of credit. Compared to personal loans or credit cards, these loans are repaid a lot quicker. Normally repaid only after one-month, the borrower is then charged a one-off fee rather than recurring interest for the loan. Personal loans offer more money, but payday lenders are quicker and are easier to get hold of.

Borrowed for no more than 31-days, the repayment is taken directly from your bank account via a direct debit.

How much can you borrow?
As these are small loans designed to repaid over a very short period, the amounts offered will be considerably smaller than those available from a personal loan or a credit card. The maximum you can borrow from a payday lender would be £1500, depending on you affording to repay it. A payday loan is often used in place of other small credit institutions like Cash for Gold or Cash Converters. The options borrowers are faced with highlights why the industry will continue to prosper.

The higher than normal interest rate is a large turn-off to most borrowers. This is however due to the repayment being a one-month period. If borrowing a payday loan today new rules mean that you will never be charged more than £24 per every £100 borrowed. As always check with your preferred lender.