Many people are still not that familiar with how a payday loan works. This is because they are reasonably new and many people feel that they are not for them. If you know a little bit about the loan you might use this information to assume that the loan is not for you. However, it is wise to find out more about the loan and how it works so that you can decide whether it will be a useful option for you. If you need to borrow some money, then it is much better to have a full understanding of all of the options available to you rather than just dismissing the options that you know very little about.
Who can have a payday loan?
With many loans there are restrictions on who can have them. This is something which can put people off borrowing as they assume that they will not be able to get a loan and therefore give up without really trying. They may also be aware that if you get turned down for a loan, this will show on your credit report and could put off other lenders wanting to lend you any money. However, a payday loan is different. They do no credit check and this means that the loans are available for anyone regardless of their credit score. You will also never be turned down due to your credit record and so there will not be the risk of this happening and reducing your credit score even more. This means that these loans are available for a lot more people than conventional loans and so it could be that you will find it more useful than others.
How much can you borrow?
A payday loan is for borrowing smaller amounts of money. It is usual for a payday lenders to lend up to £1,000. It can be useful for many people to borrow less money and so this loan could be handy. Borrowing a smaller amount also means that you will have less to repay and this can be extremely useful. It is worth noting though that lenders may not always lend the full amount that they advertise they can lend. If you have not borrowed from them before they may want to only lend you a small amount so that you can prove that you are capable of repaying before they lend you more. This means that if you want to borrow the maximum amount that they offer, you may have difficulty. However, these rules will vary between lenders and therefore it can be worth getting in touch with a selection of them as they may be able to offer you different amounts. Then you will be able to find out exactly how much will be available to you.
How do repayments work
The repayments for a payday loan work differently to other loans. The main difference is that there is just one repayment. This is great for those people who do not like the idea of being in debt and hope that they will be able to repay it really quickly. With just the one repayment it will not last for months or longer, like some other types of loans can. The repayment will take place on the next day that you are paid. This means that you are more likely to have the money available to repay it as you will have your salary available to repay it with. You will need to be sure that you borrow the right amount so that you will be able to repay it though. It can be wise to calculate how much you will have to repay so that you can check that you will have enough money.
How easy are they?
Payday loans are really easy to arrange. You may be able to arrange over the telephone or online and there is a minimal amount of questions to answers and information to provide. They are processed very quickly so you will know soon whether you have been accepted or not. You will also get the money really quickly. Often the money can be in your checking account within a few hours which means that if you need money for an emergency then this can be very useful. Many loans will take a lot longer than that. You could find that you are filling out lots of paperwork as well and so the whole application process takes longer and is more complicated. Then you might find that it will take a long time to wait before you find out if you have been approved for the loan and another wait for the money. This can not only be stressful but it could mean that you will have to wait too long to get the money and it will not arrive in time.