Payday loans can provide you with a valuable helping hand to help you bridge the gap until your next payday. Should a sudden expense arise unexpectedly then a payday loan could give you the cash boost you need to get through a financial emergency without jeopardising your careful budgeting and without needing to dig into your savings.
One of the most common worries we hear from customers looking to take out a payday loan is that they won’t be accepted for credit. That is why the Oyster team has put together this handy guide to working out if you are eligible for a payday loan with us.
So what is a payday loan?
First thing is first. You need to work out whether a payday loan is the right type of credit for you.
Payday loans are also known as cash advances. These are tailored short-term loans that are usually for a smaller amount with a higher interest rate than some other loan options. That’s because payday loans are specially designed to be paid back on the borrower’s next payday; providing quick and easy access to the funds you need.
In most cases, you will be able to borrow between £100 and £1000. This is then repaid on your next payday or within thirty days. Other lenders may allow you to borrow for longer periods with some offering three month terms with monthly repayment instalments.
This form of short term credit can be particularly helpful should a sudden expense turn up, such as repairs on a car, a replacement for your washing machine, or new school shoes for the kids. Payday loans provide you with the funds you need today and allow you to pay it back when you next get paid; tiding you over until payday.
If you only need a small amount of money and if you can afford to pay it back immediately on the day you get paid (or a date you specify within 30 days), then a payday loan could be the ideal practical solution for you.
What do I need to be eligible for a payday loan?
There is no ‘one size fits all’ when it comes to payday loans. Each lender has their own specific criteria for judging a loan application and their own idea as to what the ideal borrower looks like. But this isn’t necessarily a bad thing.
For every short term loan provider with very strict criteria for accepting an applicant for credit, there is another that specialises in payday loans for those with poor credit scores and histories. That is why it is so important that you shop around for the most suitable payday lender beforehand to improve your chances of being approved the first time.
While the exact criteria for a payday loan undoubtedly differs from lender to lender, there are some basics that you will need to be accepted for any form of credit. If you can meet these, then you are on the right track to finding the perfect short term payday loan for you.
In order to access any kind of credit in the UK, you need to be at least eighteen years old. You will not find a lender willing to go under this amount because it’s against the law. Please bear in mind that some loan providers have been known to only accept those aged over twenty-one or, in some cases, even a minimum of twenty-five years old.
Similarly, the vast majority of lenders will not approve your application unless you are a resident in the UK. If you are a UK citizen but you live outside of the UK, then many will not be able to provide you with the loan you need.
This also differs depending on which lender you go to but many providers will need to see proof that you have a regular income that meets their thresholds in order to be accepted for credit.
That is because lenders need to make sure you have enough money coming in to comfortably afford your loan repayments. Income eligibility criteria could range from £400 per month to £600 or more.
Certain lenders will also want to ensure you have not experienced any serious money problems in the past before they will lend to you. They will ask that you have had no instances of bankruptcy, that you’ve not entered into an individual voluntary arrangement, or that you’ve had any county court judgements filed against you in the last three years.
You will need to have a valid debit card in order to be eligible for a payday loan. This must be linked to the bank account in which your salary is paid into; allowing your lender to automatically collect your repayments without any hassle.
When you make your payday loan application, you will need to undergo further checks including credit scoring and an affordability assessment.
Again, lenders have their own ideas about what they consider to be a good credit score. Where some may be very rigid in their views, others will have special loans that cater specifically to those with bad credit histories.
Eligibility for a payday loan is all about finding a lender that is happy to work with you.
Loan brokers help you find the best payday loans for you
Credit brokers like Oyster are financial professionals that help you to find the most suitable lender for your needs.
In the past, the only way to know if you would be accepted for a loan was by applying. Every single loan application you submit leaves a lasting footprint on your credit report. These footprints can be seen by every lender you apply to in the future and too many applications on file can make it incredibly difficult for you to be accepted for credit.
That’s where credit brokers come in.
As a regulated loan broker in the UK, we are fully equipped to help you find the very best loan deals available to you. Simply input your details into our clever online system and you will see real payday loan deals from the UK’s top loan providers.
Thanks to our strong working relationship with all of our lending partners, we know exactly what it is they look for in a borrower. That means we can match you up with the payday lenders most suited to you and help you choose from the loans we know you are eligible for.
Here at Oyster, we are dedicated to helping borrowers like you find the very best loan deals from direct lenders. To find out which payday loans and short-term loans offer you the very best rate, apply with Oyster Loan today.