A payday loan is a form of short-term borrowing that has proven to be extremely popular amongst many borrowers, particularly in recent years. Their popularity has boomed in the UK, with thousands of applications taking place each month. In an economy where expenses are sometimes difficult to manage, this type of loan can be very helpful to make money stretch until your next pay day or at least bridging costs a little more evenly. A fee is charged for a payday loan, just like any other type of loan incurs charges.
Fees are applied according to the annual percentage rate of a company, and interest can often be charged daily, although it is more common for lenders to have a set rate charged regardless of the loan period. Where charges are accrued on a daily basis, the sooner you pay the loan amount back, the better it is for you. The terms for such loans are very short, usually no more than 30 days, or however long it is until your next pay day. It is important to pay the loan back according to your agreement or fees may apply and your credit rating may be affected.
Because pay day loans are short term, the normal criteria that you would expect for other loans do not apply. For most payday loan companies, you must be resident in the UK ,be over 18 years of age, be permanently employed and have a bank account in your name where your salary is paid monthly. Most companies also require that your bank account can accommodate direct debits so that the money you owe can automatically be transferred to them at the end of your loan agreement.
In addition, some companies also require that you have a valid debit card linked to that account. There are some companies in the market which allow you to give them signed post-dated cheques which they can then deposit so that your repayments can go in automatically, however, this method is becoming less common as more companies operate from the internet.
There are many payday loan companies on the internet. A quick Internet search will reveal many legitimate UK based companies that you can go with. Check that the company is registered with the Office of Fair Trading (OFT) under the Consumer Credit Act (1974) with their credit licence number to ensure your safety. This information should be registered on the company website, try checking in the terms and conditions section if it is not immediately obvious. If the information is not there or if you are unsure, check with the Office of Fair Trading.
Shop around to find the company most suited to your needs with the most competitive APR. Most companies who conduct this type of business over the internet require you to have a valid email address as well as adhering to the above named criteria to apply. This is so that you can be informed quickly, via email of their decision.
Once you have found the company you want to go with, fill in your details on the online form. Be ready with all of your information. Typical questions range from how much do you want to apply for, your personal details including name address and phone numbers, your monthly income, how long you have been with your current employer and your bank details.
Assuming you have satisfied all of the criteria for the company, you should get a decision pretty quickly, usually on the same day, sometimes even within minutes. The money will be transferred into your account on the same day, ready for you to spend as you wish.