A payday loan is a small temporary loan you can use to cover expenditure until the next payday. You can apply online and the decision to loan you the cash is made almost straight away. Generally the entire application can be completed on the web and the money loaned can be credited in your bank account on the same day as you make your application. A payday loan is an unsecured loan, so it is not dependent on collateral, such as you owning a house or car etc.
Generally once you make your first application you can borrow any amount approximately £300, depending on your take home pay. You are more likely to be approved the less you want to borrow, so it is advisable to borrow only what you need. Once you have successfully repaid loans with one specific company they may then offer to lend you anything as much as about £750 in subsequent loans. Payday loans can provide a useful solution in short term cash flow problems.
Who can apply for a Payday loan?
In order to be eligible for a payday loan you must be over 18 years old and in employment with a take home wage of a minimum of £750 per month. You have to furthermore have a bank account using a valid debit card. Even if you have bad credit history you ought to still have the capacity to obtain a payday loan as long when you fulfil the above criteria.
How do you get yourself a Payday loan?
The majority of payday loans are available online, so there is no delay with faxing or posting of documents. The applying process is fast and simple to accomplish. You will end up requested your company name, address, information regarding your monthly income and employment, as soon as your next payday is, combined with the amount you intend to borrow and your bank account details.
Once you have submitted the application you need to hear back from your payday loan provider within a few minutes. They will likely email you with their decision for the email address you have registered with your application.
Payday loan providers partly make their decision as if you should lend you cash dependent on the amount you need to borrow when compared to the amount you earn. Only borrow the thing you need, the less you borrow the much more likely that the application will likely be accepted and the smaller the amount of interest you will accrue.
If your application is a winner you may be sent, by email, the loan agreement showing the amount that might be lent for you, the repayment date and the volume of interest you may pay on the repayment date. Combined with the loan agreement you must also be sent loan conditions. These loan conditions should outline your rights under the Consumer Credit Act 1974 along with details about repaying the loan, cancelling the loan and also the use the private information you supply when trying to get the payday loan.
In case you are happy to proceed you sign online by providing information on your own name and answering a security question like your mothers’ maiden name. Then, email this back towards the loan provider and the money is going to be deposited in to the bank account you registered at the application process. The money can be deposited within your bank account on the same day you will make the application, so this is a really fast and efficient way of borrowing money temporary.
How do I repay the borrowed funds?
You need to repay the loan amount and also the interest accrued on the repayment date as specified inside the loan agreement. The repayment date is generally your payday, hence the name payday loan.
The repayment is going to be collected by the loan provider by debiting the bank account you registered on the application process, which is the bank account into that you get your wages paid.
Repayment over a longer period – Payday cash loans may be extended if you locate yourself in a position to be unable to satisfy all or part of the amount due on the repayment date. If this happens our recommendation is that you speak to your payday loan provider at the earliest opportunity and explain your circumstances in their mind. They will likely then be able to explain your alternatives and how to go about extending your loan.
Even if you are unable to fully settle the repayment amount, it is advisable to pay off as much as possible on the repayment date. This will help to help keep the volume of interest you owe as low as possible. Some companies may charge you additional fees for extending your loan, you should check if this is the case before you sign the loan agreement.
Regulating Payday Loan Companies – Properly regulated payday loan companies must adhere to strict laws governing the finance industry.
As with every financial product you apply for it will always be advisable to check the company supplying the loan is correctly regulated. The payday loan company you are signing up to should show its Consumer Credit Licence number within its loan conditions plus it should also be authorised through the Office of Fair Trading. If you are in almost any doubt as to if the payday loan company you are considering signing up to is fully regulated then you certainly are in your rights to make contact with either of such bodies for more information.
As long because the payday loan company you happen to be applying to is properly regulated, you will have a recognised body to make any complaints you may need to and also you can be assured that you will not be subjected to any unfair practices.
What are the advantages of a Payday loan?
Fast – One of the primary benefits of a payday loan will be the speed where the bucks can be credited to you. The amount of money you require can be available to you in your bank account on the same day that you create the application. This can provide valuable assistance in case you have a short term income problem and want money in an emergency.
Simple – The application form process is very simple, it will take just minutes to get a payday loan and you do not have spend your time posting or faxing documents to the payday loan provider, when you would along with other more traditional high street loans.
A Bad Credit Score History – Payday cash loans are for sale to people with an inadequate credit score. The reason being payday loan companies do not solely make their decision to lend based upon a persons credit rating. As long while you fulfil the application criteria there is a pretty good possibility of acquiring a payday loan. For most people a payday loan may be the only method they could obtain credit, specifically in the current financial climate where nearly all lenders are unwilling to offer loans altogether, never mind to a person using a a bad credit score history.
Utilisation of the Loan Money – There is no need to inform the payday loan provider the thing you need the payday loan for. You can make use of the money for anything you want. You may need money in desperate situations which can not wait until payday for instance; emergency medical or dental treatment, to settle a bill quickly, extra investing in holiday or even for a romantic weekend away. The selection is yours as long as you have the repayment due on the repayment date.
No Upfront Costs – You can find no upfront costs associated with a payday loan. You do not pay anything back until the repayment date you might have consented to in the loan agreement.
Why does the APR appear high on pay day loans? The APR applied to payday loans appears initially to become high. This is extremely misleading, there is however a basic reason why this figure looks so high. APR is surely an Annual Percentage Rate, and as such is calculated spanning a whole year (365 days). However, a payday loan is taken usually only over a number of days or even weeks.
The APR calculation was not made to apply to very temporary loans like payday cash loans. It was made to apply to long term loans available to get a year or even more. It is really a theoretical figure than enables men and women to compare similar long term loan products, like mortgages or ongoing credit balances.
Instead of relying on the APR rate it is more preferable to look directly in the loan agreement to see just how much interest you may be charged for that period of your payday loan. Some companies use a standard interest charge for the sum you desire to borrow regardless of the duration of the loan. It is then your decision to determine whether you will be able to pay back both the ckmesm advance you get initially and also the interest amount on the repayment date.
Many individuals do not possess savings or use of bank cards or even more traditional loans and so the convenience of a regulated payday loan provides piece of mind in case the occasion arise that they require some money quickly.
If you want money in a hurry, can not hold off until payday and are confident that you can make the necessary repayments on the repayment date, this could be the ideal solution for you. Overall, payday loans are convenient, easy to access and provide a viable option for those who require money quickly for whatever reason.