Payday Loans or cash advance loans are originally designed to tide people over until payday. Usually, you have until payday to pay back your loan plus interest charges. However, some payday lenders let you choose the repayment period that suits you and that may last up to a year.
In 2015, the Financial Conduct Authority (FCA) introduced stringent rules on Payday Loans in the UK to help improve the lending market, making it better for borrowers. After that- the payday lenders followed these rules to lend funds to the borrowers.
Now, payday lenders follow these five golden rules:
- Interest charges are capped at 0.8% per day (that’s 80p for every £100 borrowed).
- If a borrower defaults, and miss a payment, they can only be charged once for missing it, and that charge (or default fee) must be no more than £15.
- 3. If a lender tries to collect money twice without success from a borrower’s bank account, they can’t make any further attempts without the permission of the borrower.
- If a borrower’s loan becomes unaffordable, the lender must point them in the direction of a charity which can designate someone to represent the borrower in negotiations to pay the loan back
- The total amount a borrower pays for their loan in interest and charges must not be more than the amount of money they borrowed in the first place.
The Basic Prerequisites to Get a Payday Loan Include:
1.Satisfy Fundamental Requirements
The first step while applying for a Payday Loan with Poor Credit is- to make sure you meet the basic prerequisite requirements.
- Be at least 18 years of age
- Have a bank account in your name
- Provide proof of employment
2. Fill Online Application
If you meet all the prerequisite requirements, you’ll likely be able to get qualified for the loan. Before your application gets accepted- you need to fill out the application form.
Whether you request for a loan in person or do it online, the application should be moderately short.
3. Await for Approval
Once you’ve fulfilled the application process, you’ll have to wait for your application to get approved. Most lenders have a 24-hour turnaround time, and you’ll find out their decision within a business day or two.
Also, if you apply on a broker’s site, you might get approved quite earlier.
4. Get Your Money
If your application is approved, you’ll get your money swiftly.
Payday Loans being signature loans are accessible with the least troubles. The loan eligibility is not reliant only on your past credit history. You do not need a guarantor or collateral for loan approval either. Your creditworthiness is set as more credible than your prior credit records.
As long as you could afford the loan, the lenders will grant you the loan. However, a loan broker can help you protect against the lenders who raise hard credit checks and quote very high-interest rate. Whatsoever be your loan hassles, use the professional loan expert’s help to make an acquainted decision.