Over the last decade or so, mainly thanks to the Internet, a ‘new’ kind of loan has become popular – the payday loan. Getting a payday loan online in the UK now takes less than 24 hours in many cases and more and more people are taking advantage of this convenience to help them get out of short-term financial difficulties.
What are Payday Loans in the UK?
A payday loan in the UK- also known as a short-term loan, a bad credit loan and a fast cash loan – is a small loan made to people who have a verifiable income (usually from a job) and are over the age of 18 and are legal UK residents.
Short-term payday loans are made very quickly, often even to those with bad credit, and it is supposed to be paid back on the loan recipient next payday, or in some cases, the loan can be broken down to be paid in instalments over the next several paydays for an additional fee.
Why do People Take Out Payday Loans Online?
Because they do come with high-interest rates attached to them people should think carefully before they apply for a payday loan online. Is their financial need really pressing enough that they cannot wait until they get their next paycheque? In many cases though the answer is yes, especially if it is a bill that must be paid or there will be consequences to be faced (the rent or an overdue utility bill for example)
Many of the people who turn to payday loans online do so because they cannot get a loan from their own bank or building society, either because they have a credit report that is less than spotless or because they are not a homeowner and have no collateral to put up in order to get a secured loan. Payday loan companies tend to cater to these people, offering small payday loans in the UK without performing a rigorous and extensive credit check in the way a bank might.
What Requirements Do You Have to Meet to Get a Payday Loan Online?
There are now quite a number of different payday loan lenders operating in the UK and all of them have slightly different criteria that a person has to meet in order to qualify for a payday loan. Almost all lenders require that an applicant be over the age of 18 and able to prove that they are a legal UK resident. They must also have a verifiable source of regular income and a bank account as loan repayments are usually scheduled to be taken out of a loan recipient’s bank account automatically on the day the payments are due.
Some payday lenders do perform a credit check while others merely verify that the employment and income information an applicant has supplied is indeed correct. And even those companies that do perform a credit check are far more lenient with people who have less than perfect credit than most banks and building societies are. Which for many people is very good news indeed.
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