• Tue. Oct 19th, 2021

How payday loans work and what eligibility criteria are used

ByCindy J. Daddario

Sep 15, 2021

How do payday loans work?

Payday loans are a short-term loans that you can get quickly from the best source: payday champion.

You can do this over the course a month with the entire repayment amount taken out of the payout (hence, the name) or you can do it over three months with split payments.

You can get as little as PS 50 or as much at around PS 2,500. However, your eligibility will determine the amount you receive.

Payday loan companies often offer loans to those with poor credit histories. This means that their interest rates can be higher.

What is the eligibility criteria for a payday loan?

Short-term loans may not be as affordable as standard loans.

Although it may vary from one company to the next, there are some requirements you should all adhere to. These are:

  1. You are now over 18.
  2. If you borrow in the UK, you must be a UK citizen
  3. You must have a bank account unless you are borrowing from a door to door loan company.

Some lenders will then Conduct a credit check on your to see if you’ve paid back on time, or taken out large amounts.

You can also rate their affordability. This is done sometimes through the company that connects to your bank account electronically to view your income and expenses. Sometimes, you will need to complete a form to indicate what you are spending.

Some companies offer credit to the unemployed while others require that they be employed.

If you are unable to pay, you may need to provide a surety. This is typically for those with poor credit histories.

A number of factors could explain why you are denied for a payday loan. Often, an algorithm determines your eligibility.

What amount will you pay?

It all depends on which company you choose for interest.

You can charge a maximum amount of PS 24 per 100 borrowed over a 30-day period.

You can ask the lender for clarification if you are not sure how much you will have to repay.

You may see a 1000% APR APR, but that does not mean you will repay 1,000 times what you borrowed. The APR is the interest rate you would pay back if the loan was taken over a period of one month.

You may be charged interest and a maximum of EUR 15, plus late payment fees.

You can only charge a maximum amount. This will double the original amount borrowed.

How quickly can you get your money?

Many payday lenders operate online so you can get your money as soon as your application is approved.

Online lenders are 83% of those who take out payday loans. Typically, it takes up to 24 hours for approval and payment.

You may need to wait for a representative to come to your home, but you will most likely receive your loan in cash.

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