Is it Difficult to get a Payday Loan?

If you have not had a payday loan before, then you may wonder whether it is difficult to get one. If you have been turned down for loans in the past, then you may worry that this will also be the case with a payday loan. However, payday lenders do differ from many standard lenders in the way that they operate and so even if you have been turned down for other loans, there is still a good chance that you will be accepted for a payday loan. You may also feel that it will be complicated to apply or that you will have trouble finding a lender but you should find that these are easy too.

Application Acceptance

You may worry that you will not be accepted for a payday loan. This could be because you know that you are not good at handling money or that you have been turned down for loans before. However this may not be the case with this type of loan as it is not form a traditional lender and works quite differently.

There are legal criteria that they have to follow in order to lend to someone as well as general criteria that they will have. These are:

– Age must be 18 years or over
– Must have a UK address and be able to provide proof of address
– Must have an income

Most people who are looking to borrow money would be able to fit these criteria and so would be able to have a payday loan. There are a number of checks that banks do which they do not and this means that more people are eligible for them.

No credit check

Lenders will normally do a credit check. This means that they take a look at your credit record and see whether they want to lend to you. It is commonly thought that you get a score determined by your past borrowing record and lenders use this. Actually there is no such score. A credit record just shows what bills you regularly pay, what your income is, what money you owe and any debt problems you have had. From this information lenders will make up their own minds as to whether they want to lend to you. They all have different criteria and so if you get turned down by one, you may not be turned down by another. Some lenders like lending to someone who has missed a few repayments because they will make more money out of them if they do this again, whereas other would prefer someone that always repays on time.

No income/disposable income check

For some loans, such as mortgages, a check is done on your income and on how much disposable income. This means that your earnings are looked at as well as how much you have left once you have paid out all of your bills. This is done because they want to check that you will have enough money to be able to afford the repayments. This is understandable if you are taking out a long term loan as you will have a commitment to paying each month for a long time. When you just have a one off payment, as is often the case with a payday loan, you only have to find this money once.

Application Process

Some people worry more about the application process. It is understandable to be worried about filling out forms or having to provide lots of information that you may not know. However, it can be a lot simpler than you think. Firstly you will not have to get out your pen and fill out any paperwork. The main ways to apply are:

– Online
– Telephone
– Text

Therefore you can just type of few details or speak to someone and they will do it all for you. It is really simple and therefore you do not have to worry about the process. If you have a high street payday lender you will be able to do this in person without even having to make a telephone call. You will need to have some proof of ID which means something that proves that you are who you say you are. This could be anything such as a household bill, bank statement or similar. It has to be recent, official and show your name and address.
Once you have applied then you will not have to wait long to find out if you can have a loan. This is because payday lenders have a lot of staff and they realise that many people need the money quickly and so they will process the applications quickly. They will then make you an offer of a loan and once you decide to take it, they will get you the money within hours in some cases.

Availability

There are also a lot of companies out there now offering payday loans. This means that you will be able to find a lender really easily. If you stroll down a typical high street you will find a store, but it is even easier to look on a search engine and you will be able to find plenty of lenders there. There are also comparison sites where you can choose between different lenders or you can even go to companies that will take your details and match you up with a lender. There are lots of options out there which means that you should find it easy enough to find a lender that you like. You may even find it difficult to know which one to go with because there are so many to choose from. This is a good thing though as it means that there is plenty of choice and you should be able to find one that suits your specific needs and at a reasonable cost.

Conclusion

Therefore even if you have concerns, such as applying for a loan or being turned down, you will probably find that a payday loan will suit you. They are easy to apply for and there are plenty of lenders out there, so you should find that it is simple to get one.

What Criteria do you need to meet to get Approved for a Payday Loan?

You may worry that it is not worth you applying for a payday loan because you will just not be approved for one. There are usually strict criteria set by lenders which means that some people will not fit in and therefore will not be able to borrow money. It is important to remember that a payday loan is different to a traditional loan and therefore has different rules. This means that if you want a loan and are considering a payday loan, then do not dismiss it just because you think that you will not get approval. It is better to approach them and look at their rules first to see whether you are likely to be approved.

There are a number of factors that payday lenders will consider but they are still not that restrictive:

Age

A payday lender will only lend to someone over the age of 18. This is because the law does not allow lending to anyone younger. It also makes sense that they want to wait until the borrower is an adult so that they fully understand the responsibility that they have taken on and are more likely to have the money to be able to repay it. Most people are living with parents at least until they are this age anyway and so will be unlikely to need a loan like this as they will be unlikely to have emergencies that they need to pay for.

Proof of identity and address

In order to get any sort of financial product you will have to prove who you are. This is to protect the lender against fraud. They will want official documents that prove you live at your address such as bank statements or bills. They may also check the electoral roll and see whether you appear on any phone enquiries lists. If you apply in person you may be asked for photo ID such as a passport or driving licence. It is worth asking the lender what they need and what is acceptable. With most people doing banking online and opting for paperless billing, there is less likelihood of having paperwork like this and therefore there will be alternative options available. You will need to provide something though so think about what you may have that will be acceptable.

Proof of income

You will normally have to show that you have an income. This is for two reasons. A payday loan normally will expect you make a repayment on the day that you get paid. Therefore showing a payslip or bank statement will allow them to check when this day is. They will also be able to see that you get a regular income and therefore are able to repay the loan.

This is not the same as a credit check, which will look at much more than income, such as what debts you currently have, what your history of debt repayment is and how reliable you are at paying your bills and rent. They will not normally worry about where the income comes from either. This means that you do not need a permanent job or even for the income to come from work. It could come from benefits, pension, returns on an investment or things like this. There are lots of different places where you can get an income from. They will want it to be something regular so that you can guarantee that there will be an income payment arriving on the day that the loan is due to be repaid and then you will be able to show that you will have the money available to repay it.

Bank account

Most people have a bank account and it is necessary to have one for most types of loan. A payday lender will want you to have a bank account so that they can set up a direct debit to go from it to repay the loan. They will set this up for you so that the payment goes out on the day that you get paid so that you will have the money available to repay it. Normally this will be a lump sum repayment for both the amount that you borrowed and the interest but there are some payday lenders that will allow you to repay over several months to make it easier for you. It is up to you to find a lender that offers more flexible repayments if this is something that you think that you will need.

These are very simple criteria that you need to fit. So you need to be over 18, live in UK and be able to prove it and your identity and have a bank account. Most people are able to do this and therefore would be able to apply for a payday loan. Although lenders do make their own rules and some may have other constraints, this is unlikely. The whole idea of payday loans is to provide emergency loans to those who cannot borrow elsewhere and so they would not want to make it too difficult to borrow by having too many constraints. They do have to make sure that they get the money repaid though, which is why they do have some checks to do. However, with just a few things to check, it does mean that the application process is quick and easy and the loans can be approved really quickly. This allows them to be able to provide the required loan within a few hours of applying in some cases, so if you have a financial emergency and need money really quickly, it means that you will be able to have some options for getting some money quickly. You will not have to spend a long time looking for information either, you should be able to get hold of a few documents and then you will be able to apply. It should all be straight forward and simple so nothing to worry about.

What can you use a Payday Loan to pay for?

Often loans are designed for certain things. For example a mortgage is buying a home and a student loan for paying for a course. However, payday loans are not set up to pay for something specific and you will not get asked what you are using the money for. However, it is worth thinking about what you are using the loan for and whether it is the right use for it.

Unexpected Bills

If a bill arrives that you had forgotten about or were not expecting to appear quite yet, then you could find that you are struggling to have the money available to pay for it. It may be possible to phone the company and ask if they can let you pay less or if they can delay the payment until you have the money available, However, if this is not possible, then you could be a risk of having a service cut off or being evicted if the bill is for your rent or a utility. This means that you will need to pay it or else you could be in a really difficult situation. This is the sort of situation that a payday loan was designed for. They are so easy to set up and quick to apply for that it means you could have the money within a few hours and then you will not need to worry about that bill.

Emergency Items

If you run out of thing that you need to buy and they are really necessary then you may wonder where to turn. You may have no food to feed your children, need a piece of compulsory school uniform, have to replace a broken down fridge or something like this, then you will not be able to wait for the money. It could be that you are a long way from pay day and therefore just cannot hang on until then to be able to have the money available to pay. In this situation a pay day loan can again help you out as it is so speedy, you will be able to get the money that you need really quickly.

Making Ends Meet

It may be that you get towards the end of the month and find that you have run out of money. It is so easy to do and many people manage to do it. This means that if you have anything that you need to buy then you will have no money to be able to get it. If you are just a few days away, then you may be able to manage, but it all depends on whether you have paid for everything you need to or whether you have extra bills to pay or need to buy food and other things. It is worth thinking carefully before getting a loan to make sure that you really do need it, but if you do, then you should find that you will be able to apply and get the money you need easily.

Car Repairs

Every car owner will need repairs to their vehicle at one time or another. It can be really expensive and you may find that you do not have the money to be able to afford it, especially if it is a long time since you were last paid. This means that you may need to consider a loan to pay. If you can leave your car off the road for a while and manage without it, then you might be able to wait until you next get paid before you need it. However if you rely on it to get you to work then you need to make sure that you can get there. If you cannot get a lift from someone else then you will need to get the car fixed or else you will not be paid for your job. Therefore a payday loan could really help you out as it could cover the cost while you wait until your next pay day to repay it.

New Mobile Phone

If you have a problem with your mobile phone and it breaks or if you damage it and you have no insurance then you may need to find the money to replace it. For some people a phone is not essential and they will be able to wait to replace it but for others, they will use it to keep in touch with friends and family and it may be their only device for watching television or connecting online. This could mean that it is something which would need replacing right away. Some people have insurance so the cost of this would be covered, but for many people it is an expensive extra that they decided not to bother with and therefore have to pay for it themselves. However, phones are expensive and it could be too much to pay, especially if it is a long time since you were last paid. If this is the case, then you may consider borrowing the money using a payday loan. These loans will be able to provide the money quickly so that you can replace the phone and you will be able to wait until your next pay day before you have to find the money.

Pay off a Payday Loan

Sometimes people find that when their payday loan repayment is due, they do not have enough money to cover it. They may have other bills which are paid first or just not be paid very much and find that although the direct debit is set up to pay it, there just is not enough money. If you cannot pay back a payday loan then there are charges and so it can be worth looking at ways that you can pay it off and using a payday loan is one option. It is worth calculating the costs though and seeing whether you will be better off paying it off this way or just waiting until you next get some money to pay off the original loan.