A payday loan is a type of borrowing designed to be paid back over a short term.
This might be over the course of a month, where the full repayment amount is taken when you get paid (hence the name), or over three months, with split repayments.
How payday loan eligibility is decided
Unlike most standard loans, there may be different criteria for affordability when it comes to short-term lending.
Although it differs from company to company, there are some requirements that all will need you to meet. These are:
- You must be over 18 years old.
- You must be the citizen of the country you are borrowing from.
- You must have a valid government identity.
- You must have income proof or a payslip.
- You must have a running bank account.
Some lenders will then complete a credit check on you, to see whether or not you have a history of repaying on time or taking out large amounts of credit. This can be done through various credit checking websites available on the internet.
Your affordability will also be assessed, which is sometimes done via the company connecting to your bank account electronically to see your income and expenditure. In other cases, you have to fill out a form to show what you have coming in and going out.
Some companies will lend to people who are unemployed, while for others you having a job will be a pre-requisite.
You may also need to provide a guarantor, who is somebody that can vouch for your repayment, and do so if you fail to pay. This is generally for people with little to no credit history.
If you’re rejected for a payday loan, it could be for several factors, and decisions are often made by an algorithm that determines your eligibility.
The loan can be approved in as few as 15 minutes. In most circumstances, the borrower writes a check for the loan amount plus a lending fee, and the lender holds onto the check until a predetermined due date.
Most payday loans are extended for just a few weeks. When the loan comes due, the borrower either pays off the loan or allows the lender to cash the post-dated check or otherwise make a withdrawal from the borrower’s account. no credit check payday loans online
Final Thoughts
Payday loans can prove to be helpful in the time of crisis when you fall short of cash and nobody from your friends or family can lend you money. Online lending services like https://paydayplus.net/200-payday-loans can offer you the quickest disbursal at competitive interest rates to cover your emergency expenses.