But, he does have credit problems and he is going to get a mortgage and that is all he cares about right?

Oh, and £4,500 doesn't have to be paid upfront because all we will do is add it onto loan amount. So that's ok ,right?

NO,NO,NO.

Ok I am talking about a hypothetical situation but this is one that is repeated everyday throughout UK. In my opinion it is nothing more than robbery and shows scant regard for clients wellbeing.

How can anyone justify charging that to a client that will already have to pay a higher interest rate than a clean client would.

So, to recap, £150k loan now becomes £154,500 and that is before you even get to solicitor and arrangement fees, let alone Mortgage Indemnity Premium (MIG.

So, rule of thumb here is a simple one.

Ask your broker to justify their fees and if you find anyone charging a fee of more than 1%, walk away. Quickly.

Go through lender’s approval criteria very carefully. Apply only to one where you can qualify. If you apply to a company that has stringent criteria and get rejected, that can actually hurt your chances of getting approved by another company with more relaxed criteria.

If you’re applying online, ask yourself if lender’s website seems professional and well-organized. Do they have clear information and guidelines on site? A comprehensive FAQ?

If you need clarifications on anything, call up and ask. In fact, it’s a good idea to ask a few questions to each loan provider you’re considering. That way you get a feel for their responsiveness and get additional information to base your decision on.

Most important -- do they have an SSL certificate on application page? This indicates data is being transmitted securely. Secure pages have web addresses that begin with “https:” instead of “http:” and in addition, you’ll see a lock symbol displayed in your browser. If a lender is using a non-secure page to collect information about you, find another lender!

See this page for 10 things to check out before you finalize a payday loan: http://www.payday-cashadvances.net

Acting on above points will help you make better choices about payday loans. The best solution is, of course, to get your personal finances into excellent shape so that you never need to borrow in an emergency.