Payday Loans – UK Direct Lenders
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Representative 277.5% APR Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed). The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances.
Payday loans are one of the best financing solutions for unforeseen expenses, such as late bills and urgent car repairs, before you get your salary. They are very easy and quick to obtain with minimal requirements making them genuine lifesavers to many people who have been bombarded by emergency situations in their lives. If you are considering on taking out a payday loan for an urgent need, below are some of the important things that you might want to know about the financial product.
What are payday loans?
A payday loan is a short-term loan offered in small amounts from £50 to as much as £1,000 that needs to be paid back, as its name suggests, typically in your next payday. Because of their short payment periods, low value, and high risk to lenders, payday loans are generally more costly with higher interest rates compared to long-term loans and traditional forms of loan.
The Benefits of Taking out A Payday Loan
Despite the high interest rates and APR, payday loans continue to be popular options in the UK especially for borrowers who are looking for a quick cash infusion. There are also a number of benefits that you can enjoy from this type of financial product including:
1. Fast Way To Obtain Cash
As long as you provide the information that they are looking for, reputable payday loan lenders like (website name) will approve your application almost in an instant. There are no hectic paperwork involved and falling in long queues that you will normally have to undergo in traditional loan applications if you apply for a payday loan online. There are even lenders that offer fax-less transactions which mean you can accomplish the entire process of taking out a payday loan without a single shred of paperwork. And once your application is approved, it will just take a few hours for the lender to transfer the money to your account typically on the same day or on the following working day you made your application.
2. Very Convenient
You can take out a payday loan purely online anywhere and anytime with your computer or mobile device as long as you are connected to the internet. There is no need to schedule an appointment with a loan officer or call your lender numerous times to get the money that you availed for. Simply fill in the application form provided online, submit it, and once you are approved you will have your money the following business day at the latest.
3. Easy To Qualify
To qualify, you only need to meet a few basic requirements - the most important one being able to provide proof of stable income. As long as you have a stable income that can be verified by the lender, getting approved is almost always guaranteed. Aside from your income, you also need to be:
· 18 years or above
· A UK resident
· Have an active checking account
· Have an active email and phone number
If you are currently employed, however, chances of being approved by a payday loan lender is pretty high.
4. Access to Higher Amounts
Payday loan lenders usually put a cap on the amount of money available for new borrowers. The cap usually hovers around your ability to pay and the lender's criteria for first-time clients. After you have successfully paid your first payday loan, however, and made another application, you will gain access to even bigger amounts. Many reputable brokers like Pickaloan can find you payday loans from as much as £1,000 for the right borrower.
5. Opportunity to Build Credit
Because payday loans come in smaller amounts, they are also perfect instruments to get your credit rating back as long as you make the proper repayments. After you receive your next paycheck, simply pay back the amount you borrowed plus the interest rate and it will be recorded in your credit profile. The more payday loans you borrow and pay, the better it would be for your credit rating.
Bad Credit Payday Loans in the UK
Almost every adult in the UK has his own credit report that details his use of credit including payments on phone bills, to credit card usage, bankruptcy, use of debt management and much more. Lenders use the information from your credit report to evaluate whether or not you are a responsible borrower and determine whether you have the habit of making repayments. If you have a bad credit, then it would be difficult for you to obtain different financing options.
But there are payday loans for bad credit offered by researchers like Pick-A-Loan, which gives borrowers the opportunity to take out a loan even if their credit history says otherwise. But because the risk is higher in the part of the lender, except for higher interest rates than you normally would if you have a better credit standing when obtaining bad credit payday loans. But as long as you make your repayments on time, it won't matter if you have a bad credit standing as it will tell lenders that you are becoming a responsible borrower and user of financial products.
Payday Loans UK: How they Work
Applying for a payday loan in the UK is pretty straightforward. The process starts by making an application and then selecting an amount that you intend to borrow and the length that you want to borrow it for just like you normally would with any other type of loan. The only difference is that the amount of money that you can borrow and the length of time are comparatively smaller.
There are also lenders who impose late payment fees in their payday loan offers but the Financial Conduct Authority has put a price cap on payday loans which means you won't have to pay back more than twice of what you have borrowed.
Once your application has been submitted, the lender will perform a credit check, affordability evaluation, and other checks to determine your eligibility. If the lender sees that you have the financial capacity to make the proper repayment, getting approved and having your money deposited to your checking account will normally be a breeze.
- Paydays loans are simple loans designed to help people solve financial emergencies before they receive their next paycheck.
- They can offer small amounts of cash on a short-term basis-usually expected to be paid back by the next wageday.
- These loans attract high-interest rates due to their short term and high-risk nature.
Payday Loan FAQs
How Much Can A Payday Lender Give Me?
Payday Loans are short-term loans so customers can only get small amounts of cash at a time. Most lenders can offer up to £1000 depending on the customer's request and credit-worthiness. Your circumstances and current financial situation may also play a role but some lenders may be willing to consider other favourable conditions.
How Do I Know I Am Eligible?
Qualifying for a payday loan is really simple. While you must have paid employment, you must also...
- Be exactly 18 years old or above.
- Have an active bank account.
- Be a full resident of the UK.
- Have an email address and a UK phone number.
How Do I Send My Application To The Lender?
This process is really simple thanks to digital technology. All you have to do is to fill an application online and select the amount that you wish to borrow. Your completed form will be sent to the lender for approval and if you are successful, the loan amount will be sent to your account within a matter of minutes.
Do I Have To Worry About My Credit Score?
Credit scores play a role in determining whether you get the loan or not. If you have a bad credit score it may be slightly difficult for you to get your payday loan request approved. However, some lenders offer payday loans for people with poor credits. This creates an opportunity to get loans regardless of their current financial situation. Unfortunately, the risk is higher on the part of the lender so high-interest rates will apply.
What Happens When I Fail To Make Repayment On The Due Date?
Payday loans are perfect solutions for financial emergencies if you can make repayments when you are required to do so. However, if for some reasons you are unable to fulfill your end of the bargain, then extra charges will apply. A continuous default on loan repayment will hurt your credit ratings and you may not be considered for more loans in the future.
This is why we advise that you only borrow amounts that you can conveniently payback. But if you are suddenly faced with a situation where you can't pay back the loan, make sure to contact your lender before the due date. Some lenders may have arrangements for this kind of situations.
Can I Take Multiple Loans?
While this may not be approved majority of the time, some lenders may be willing to approve multiple payday loans requests. However, you must have a very good credit history for any lender to even consider approving your request.
Unless you are faced with a serious financial emergency, it is not necessary to take up two payday loans concurrently.