Payday loans: frequently asked questions
At moneysupermarket.com we want to help you make an informed decision before you opt
for a payday loan. Consequently we have compiled a list of frequently asked questions that
we hope will put you on the right track to determining if a payday loan is right for you.
Quick links:
What is a payday loan?
What can I use a payday loan for?
What do I need to qualify for a payday loan?
How much can I borrow?
How much do I have to pay back?
Can I receive a payday loan if I have a poor credit history?
How do I repay the loan?
Does it matter if I am paid weekly?
Does it matter if I do not own a home?
Does it matter if I am self-employed?
Will my employer be contacted?
How long does it take to get the money?
Can I roll over the loan to my next payday?
Can I take out more than one payday loan at once?
What documents do I require to take out a payday loan?
Who offers the best rate?
A
payday loans is a short term cash advance to be repaid on your next payday. In effect it
works like a bridging loan when you are short on cash and require a quick solution.
With the majority of providers you will not need to justify what you need a payday loan for
- it could be to pay off bills, to cover for an unexpected event, or even to do something
for yourself such as take a holiday. As long as you can cover the loan with your next pay
packet, you are likely to be approved.
All you require is a regular income and an active bank account with a debit card. Some
providers may require a chequebook as well.
This varies between providers. Minimum loans are usually £80 and the maximum is usually
£800-£1,000.
On top of paying for the money you have borrowed, you must pay a set interest fee. In
the majority of cases this is £20 for every £80 you loan, though this can vary between
providers.
Yes - however, you must be able to prove that you have an adequate income to pay back
the loan and interest.
By debit card or cheque. Payment methods can vary between providers, but debit card
is the most common.
Most providers make the cash advance payable after the fourth payday.
No. It doesn't matter if you are a tenant or homeowner as long as you can supply
details of your address.
Generally this will not be an issue as long as you have a regular income that is
paid into your bank account.
A payday loan is completely confidential and no personal information can be passed
on without your agreement.
This varies between providers. The majority of providers will put cash into your
bank account on the same day, though with some you might have to wait until the
following working day.
Most providers will insist that you pay the interest for the first month and may
charge an additional fee for rolling. Others will insist that you start reducing
the balance after a set period of time.
No - all payday loans must be resolved before another can be taken out.
This should be clearly outlined on the provider's websites. However, you will
usually require bank statements, your last payslip, proof of address, proof of
signature and photocopies of both sides of your debit card.
Interest rates and terms can vary so be sure to use the
price comparison tool
at moneysupermarket.com to compare payday loans across the market.
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