Payday Loans Online

A nimble way to apply for payday loans online

Representative APR: 279.5% | Representative Example: Loan Amount: £300 | Borrowed for 60 days | Total Repayment: £420.82 in 2 monthly installments of £210.41 | Interest Charged: £120.82, interest rate 120.8% pa (Variable).

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A Simple Guide to Payday Loans Online

Are payday loans online the way forward? How convenient are they really? If you’ve been asking yourself questions like this i’d definitely read on.

Whether you have an unexpected financial emergency or just need some cash to tide you over for the rest of the month, payday loans online are an option that many people turn to. When used responsibly, payday loans can offer financial respite when there are few options available. Although, it’s important that you understand the various aspects of payday loans to ensure you borrow responsibly.

This is where our handy online payday loan guide can help. It covers all the most important information you need to know about payday loans, making it easier to determine whether this type of financial assistance is suitable for your situation.

A Mobile Phone Explaining What Payday Loans Online Are

What Are Payday Loans Online?

Payday loans online are a web-based promotion type of a short-term loan, they’re designed to help people get to their next pay day. It’s an unsecured loan and the borrower is expected to repay it in full along with interest within a few weeks, usually on their next payday, hence the name payday loan.

The money is limited to small amounts, usually a maximum of £1000. It’s wired directly to the borrower’s bank account that same day or shortly after. Given the higher interest of this type of loan, it’s always recommended that you use them sparingly, such as emergency situations.

understanding how payday loans work online

How Do Payday Loans Online Work?

Payday loans are one of the easiest lines of credit to obtain. You can apply online and find out if its approved within minutes, after which the money is credited to the recipient’s bank account, usually within a few hours of approval.

When applying for the loan, the lender will clearly show how much interest is included on top of the loan amount. The borrower must agree to repay it on a specific date before receiving approval, usually on the date of their next payday.

There is a limit to how much can be borrowed. Lenders set maximum amounts you can borrow, usually around £100 and rarely over £2000.

How Long Does the Loan Last?

Although designed as a short-term loan, payday loans can last for varying lengths. Normally each lender has different rules regarding the duration of the loan. For instance, because most people plan to repay on their next pay day, loans are usually no longer than a month, as the quicker it’s repaid the less it costs.

That said, some payday lenders do offer extended durations for these loans. This is often upwards of a month, although this is dependent on how much the borrower can afford and their current financial situation.

How Do I Get a Payday Loan Online?

If you are looking for payday loans online there are many places you can try. We’d always recommended that you shop around to get the best repayment rates.

Most lenders make applying for the loan quick and easy. Simply fill out the amount you need to borrow, select a date of repayment, and after accepting the cost of repayment you are processed for approval.

Online applications are very simple to complete. Just provide the standard personal information and any financial info the lender needs. You’ll find out whether you can get the loan shortly after applying.

How Much Money Can I Borrow with a Payday Loan?

The amount you can borrow from a payday loan varies from each lender. Some only offer small cash loans of under £1000, with some limited the amount to around £500. This might be suitable for those less serious financial emergencies or to get you by until your next payday.

For more serious situations, you will find lenders that provide loads upwards of £2000. These do come with higher repayments and usually take longer to repay due to the size of the loan. Also, there are factors that will influence how much you can borrow such as your credit rating and financial history.

a woman applying online for a payday loan

When is the Best Time to Apply for a Payday Loan Online?

Payday loans are often the last option for someone that requires a short-term loan. It’s best used as a one-time loan for unexpected emergencies or to tide you over for a week or so till you get paid.

For example, if your boiler broke and needed it replaced but you don’t have the money to cover it until you get a paid, then a payday loan can be a suitable option. Similarly, if you had to make payments for car repairs and now have no money left for groceries, a payday loan is an option to see you through till pay day.

Payday loans online are also best used for borrowing small amounts. The less you borrow the cheaper the repayment is, so if you only need a hundred pounds or so it can be a lot easier to manage and repay on time.

However, it’s never advised to apply for a payday loan unless you are certain you can repay it on time. This means you should always have a source of regular income prior to borrowing. Otherwise, you won’t be able to repay and face higher costs due to late fees and more time accumulating interest.

Basically, if you can’t afford to repay the loan with your wages on your next payday, then its best to avoid applying for one. Never fall into the trap of taking a second loan to repay the first loan, as this can quickly spiral into uncontrollable debt.

making sure you're eligible online for a payday loan

How Do I Know if I am Eligible for a Payday Loan Online?

Many people are unsure if they are eligible for payday loans online. This often occurs because their credit or financial history isn’t the best, so they can’t get a traditional line of credit from a bank or building society. Meaning that they don’t know if the same applies to a payday loan online.

One of the most alluring aspects of a payday loan is that they are easy to obtain. Lenders understand that the financial history of each borrower is different, so fewer restrictions are in place. Most people just needing a source of income, proof of employment, valid ID, and a bank account.

It is worth remembering that each lender has unique criteria to be eligible for their loans. So, always clarify this before applying to ensure you aren’t disappointed if they disapprove your application. Common criteria for payday loans online include:

  • Be 18 years and above
  • Have residency in the UK
  • A bank account with a debit card
  • Earn at least £750 per month

Should you have all the above then it’s likely that you are eligible for an online payday loan!

a mobile phone showing bad credit payday loans online

Are Payday Loans Available for People with Bad Credit?

Yes, in most cases payday loans are available to people with bad credit. There are usually additional expenses due to the poor credit rating. However, with higher interest rates charged due to the higher risk of the loan for the lender.

Some lenders avoid people with poor credit but there are many that will provide credit, offering financial relief for people that don’t have many other options. If you are ever unsure, simply apply online and wait for the loan to be approved or disapproved.

Does a Payday Loan Affect My Credit?

A payday loan is like any form of credit. Repay it on time and it doesn’t have a negative impact on your credit rating. In fact, it could actually help improve your credit as there is evidence of you repaying loans on time and in full.

However, like any other type of loan, if you miss repayment on your payday loan then it will have a negative impact on your credit report. So, bear this in mind if you are looking to maintain a good credit rating!

knowing how to use your payday loan responsibly

How to Responsibly Use a Payday Loan

It’s vital that anyone using a payday loan does so responsibly, otherwise they could face even tougher financial situations. The biggest issues people have with payday loans is not having enough income to cover the repayments. Another might be poor financial planning for repaying, both of which can lead borrowers to become reliant on the loans.

So, always budget for any loan before you apply for it. If you need £200 and the interest on top is £50, budget for that exact amount as soon as you get the loan. The goal is to ensure you reach your payday with enough money to repay the loan and still have enough to see you to your next pay.

Put aside money each day or week to go towards the loan, especially if the repayment falls after your payday. Also, really try to stick to a tight budget until you have repaid. Avoid unnecessary purchases, and keep daily expenses to a minimum. This is much easier to achieve with a good budget/financial plan.

Thankfully, the loan duration is quite short so you won’t need to stick to the tight budget for too long. It may seem like a lot of hassle but it’s going to help save you a fortune. Essentially you can avoid late fees and extra interest, so planning and sticking to a budget is well worth it.

Finally, never borrow more than you need. It can be tempting to get an extra amount on top of what you need but this is never worth it. At the end of the day it’s just going to cost you more money, and increase the risk of missing a repayment.

Representative APR: 279.5% | Representative Example: Loan Amount: £300 | Borrowed for 60 days | Total Repayment: £420.82 in 2 monthly installments of £210.41 | Interest Charged: £120.82, interest rate 120.8% pa (Variable).

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Timescales on receiving your funds may vary from lender to lender and depends if your bank accepts faster payments. The loan amount and interest rate offered is subject to the lender’s requirements and approval.

Warning: Late repayment can cause serious money problems. For help, visit moneyadviceservice.org.uk