Once you have decided to apply for a Payday Loan, you might be wondering what will happen between now and the time you receive funds in your bank account. It’s natural to have questions — especially when you give personal information (like your address) to a company that provides financial services. This article will answer some of the most common questions regarding applying for a Payday loan so you won’t be left in the dark.
Potential fees and interest rates
Payday loans are meant to be short-term loans with high-interest rates and fees. If you apply for a payday loan, you should understand the potential fees and interest rates that come with it. Be aware of all charges associated with a payday loan before applying for one.
If you have an existing loan with another financial institution, some lenders may deny your application because of it. This is because they may not want to lend money to people who have problems paying back loans promptly.
Credit checks
It’s now common for credit checks to be carried out when applying for a payday loan which can cause problems if your application is refused. The reason is that if you have outstanding debt, this information can show up on your credit file, and you could find yourself being declined.
If you don’t have good credit or your credit score isn’t high enough to get approved for a loan, you will likely need someone with good credit to act as a guarantor. A guarantor is someone that agrees to pay back the loan if the borrower doesn’t pay on time. The borrower can be young or old and must be living in the same state as the guarantor. You can find a co-signer at any payday lender location or online payday lender website.
Online applications
Usually, online payday loan applications start with entering personal information into a form on the lender’s website. After that, the applicant must submit this information and wait until the company approves them.
Once the approval is done, applicants need to answer questions regarding their credit card details and bank account number if they have one. It is essential to mention that not all lenders require a bank account number from their applicants. Usually, though, it does not matter whether you have one or not, as most of them will allow you to use your debit card for transactions instead of your bank account number. It all depends on the lender itself, and you should always read through the Terms & Conditions before starting any application process.
Quick transfers and fast responses
Most people applying for a payday loan get a response from the lender within a few hours. The response usually comes via email. When you accept the lender’s offer, you can expect to receive your money within a few hours. The lender transfers the money electronically into your bank account so that you won’t have to wait for a cheque to arrive in the mail. This is part of why getting a payday loan is so convenient and beneficial. It’s also why so many people with emergency expenses are opting for this type of borrowing over other options.
Providing relevant documents
Before you can get a final response from a private lender for a payday loan, you need to provide them with some documents. This usually includes proof of income in the form of pay stubs or other documents. You also need to send a copy of your passport or driver’s license to confirm your age and citizenship.
Payday loans rates
A payday loan is a small, short-term personal loan. The lender will often hold the borrower’s paycheck until the due date before giving it out. In exchange for this service, they charge a high-interest rate. The amount of money you receive from this type of loan depends on how much you pay in fees and interest charges. So it’s possible to take out a £1000 payday loan that may cost you £1500.
Before you get a Payday Loan
1. Make sure you understand the fees, interest rates and payment methods.
2. Be prepared to supply bank account information and note that your bank may not allow multiple “debits” on the same day.
3. Ask questions right away if there is anything you do not understand. If you are wondering, “what is a payday loan?” this article can give you some insight into what it is.
4. Do your homework before making a decision and take advantage of all the information available.
