Payday Loans - The Full Facts
Unfortunately, a number of people find themselves unable to cope with the growing
expenses of everyday life, and emergencies can hit budgets hard. 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 and convenient guide to the basics 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 straightforward 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 hour period but some providers will offer a quicker service,
in as little as an hour, or a slower service, which takes up to two days. This can
see the funds transferred into the bank account within the hour but this
may incur an additional fee in some cases, depending on the lender.
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 can be a confusing 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 amounting to around £29 for every £100 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. Please see our FAQs section for more information about this.
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 helping ensure they are able to meet their repayments in a responsible way.
