What you need to know before applying for a payday loan
One of the easiest ways you can apply for a payday loan is online. You can do the application from your tablet, computer, or even internet enabled mobile. The good thing is that the approval decisions can usually be sent to you in a couple of minutes.
Many payday lenders provide an online application process, so you just need to spend a few minutes to submit all the personal details together with the information about the payday loan request. Lenders can then assess your payday loan application to check for affordability. This article explains what you need to know before applying for a payday loan.
What you should know about a payday loan
In most cases, your loan approval can be done the same day and the money sent to your savings or checking account within minutes, but this depends on your payday loan provider. Keep in mind that payday loans are short-term loans that work in the same way as other instalment loans. It means you can borrow cash over an agreed time and repay it on specific dates.
You can do payday loan repayments electronically via continuous payment authority. Once you set up the loan agreement, you need to give the bank account details and agree on a scheduled date for the cash to be sent from your bank account to your payday lender.
It makes sense to search for direct lender payday loans. You can borrow a payday loan for a short period, but the interest rate for these loans are usually higher than the traditional loans like personal loans. The good thing is that payday loans are fast to process and when your loan application is approved, the cash is sent directly into your checking account the same day.
The lender can then take repayments from the bank account on your next payday along with any charges or interest fees. Since payday loans usually have higher interest rates than traditional credit products, people with a bad credit history can have greater chances of being approved by many lenders. This is because these higher interest rates may allow lenders to be relaxed when it involves underwriting.
The benefits of payday loans
The major benefit of a payday loan is immediate access to money when there is an unexpected or urgent cash emergency. You can even decide to borrow small amounts like GBP100 if that’s all the money you need.
Many people who take out payday loans do it to cover some unexpected expenses like replacement of household items, a car repair, or medical bills. A payday loan can also offer a stop-gap in case there is a sudden decline in income.
However, you need to know that it’s crucial to choose the right payday lender. The payday loan market has changed a lot in recent years. There are now new rules that are benefiting borrowers, making payday loan borrowing more transparent and cheaper. Therefore, it’s a good idea to check the terms and conditions of these payday loans before you decide to get one.