Payday Loans – How convenient are they?

Unfortunately, a number of people find themselves unable to cope with the growing expenses of everyday life. In these instances it is sometimes necessary for individuals to borrow money from lenders, with payday loans being one of the options available for this. Despite the widespread availability of these loans a number of people are still unsure of exactly what they offer.

Here is a quick guide to all the facts you need to know about payday loans:

What are the loan criteria?

As with all types of money lending there are certain criteria which you will need to meet in order to receive payday loans. Successful applicants must be aged 18 or over and be in employment – whether this is full or part time. The employment must be paid and applicants must provide details of this when making their application. Applicants must also have an active UK bank account and be a resident of the UK.

What is the application process?

The application process is relatively simple and easy to manage, making it incredibly easy for applicants. The process is typically conducted online, with applicants simply filling out an online form. Once the details have been entered and submitted applicants will typically receive a decision within a matter of minutes, giving them an almost instantaneous decision.

If the application is successful then the loan amount will be transferred into the bank account of the applicant within a relatively short space of time. On average this will occur over a 24-48hour period but some providers will offer a quicker service. This can see the funds transferred into the bank account within the hour but will usually incur an additional fee.

What interest is accredited?

The interest rate for these types of loan is quoted at the Annual Percentage Rate or APR. This means that they can sometimes appear quite high but this is not necessarily a fair representative of what will be incurred. As the loans are taken for a much shorter period of time the actual interest accredited is lower, typically amount to £20 for every £80 of loan.

What is the repayment process?

In terms of repayments, these same day loans have a relatively simple process. The full loan amount, inclusive of interest, is repaid via a single transaction at the termination of the loan period (typically one month after the loan has been approved). The repayment is made via a debit card transaction, with the details of the card being taken during the application process. This means that individuals simply need to ensure that they have sufficient funds in their account on the designated date.

What information are you given?

Payday loan providers will make sure that their customers are given all of the information they need upfront during their application. This will include details over the interest rate, repayment date and criteria which is required for the application. Having all of the information at hand will allow applicants to make an informed decision, encouraging responsible lending and ensuring they are able to meet their repayments with ease.

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