Qualifying for a Payday Loan

It does not matter if your next pay cheque is due to come in one week or four weeks, sometimes the wait for that money is too long, especially when a financial emergency arises. Whether you had to take a trip to the hospital because you broke an arm, you need a new radiator put in the car, or your boiler called it quits again, short term financing like a short term same day loan can help you get the money you need until your next pay cheque arrives. Payday loans, or same-day cash advances, are simple, quick alternatives to make it from one pay cheque to the next - and qualifying for one of these loans is not as difficult as you may think.

Get clued up

Before applying for a payday loan, you should know what it takes to qualify for one of these cash advances. Luckily, payday lenders in the United Kingdom do not require their customers to meet strict rules and regulations like other financial institutions do, such as banks. The loan process through payday lending companies is easy and straightforward, allowing most people to obtain a loan in less than 24 hours. Depending on the lender, you can get cash in hand or in your bank account, in just a few hours - this is not guaranteed but the lenders do offer a one hour payout via faster payments.. This speedy process eliminates the worry and stress brought by money emergencies.

• In order to qualify you have to be a legal adult. Therefore, people under the age of 18 will not be eligible for a cash advance.
• You also must be a legal and permanent citizen of the UK. And, no matter where you reside in the United Kingdom, you need to have lived there for a minimum of three months. This assures the lender that you will not "skip out" on your repayment obligation.
• You also need a steady employment history; therefore, you must have worked for your current employer for a 3-6 month minimum time period. Applicants are also asked to have a bank account in good standing so the lender can transfer the loan into the account.

The average loan amount ranges from £80-£1000. Many lenders will set up a repayment plan that involves automatically drafting the repayment amount out of the bank account to which the loan was transferred.

Should you apply for a loan?

As you have probably deduced, the requirements asked of payday loan applicants in the UK are much less stringent than those demanded from banking institutions. However, because there are formal interviews and collateral claims involved, be prepared to pay a higher interest rate than what is typically charged on the high street. Despite the interest rate, same day loans are a better alternative than going to loan sharks and pawn shops when a financial emergency arises. These lenders and brokers are regulated by the Financial Conduct Authority now. Often having a large team of box tickers following all moves and claims. Hello box tickers!

Evaluating the Risk

Because loans online are easy to obtain, they are a popular option for people who need a quick way to get a little bit of cash. However, the British media continues to give payday lenders bad press. This type of lender offers a short-term solution for people who run into financial emergencies. People can complete the application process on the Internet without having to post or fax documents to the lender, all within 5-10 minutes. Once completed and approved, the money is transferred to the applicant's bank account.

Are they really a good thing or are they exploitative?

While these loans seem like a great option for cash-strapped individuals, there are some negative aspects as told by the media.

In a typical news article covering payday loan institutions, it is common to read about the many disadvantages of using this type of financial service. Firstly, some people believe that payday loans are much too expensive. They also feel that the marketing tactics used by these businesses portrays the message of "credit entitlement."

These writers cite studies detailing the debt downfalls that happen as a direct result of getting a payday loan.

While the facts of the fee structures and business model of these lenders cannot be disputed, there is one point the media fails to mention. Just like any other type of credit or cash loan, the responsibility of using a loan wisely falls on the consumer and only the consumer. For some people who find themselves in urgent money situations that require immediate access to a certain sum of cash, a short term loan may be their only choice.

These types of cash advances can be lifesavers in times of car breakdowns, medical emergencies and other unexpected expenses. These emergencies are the driving force behind the payday loan industry.

Be financially cautious, never use repeatedly

Like most consumers in the current economy of the United Kingdom, you have probably learned how to be financially cautious. You have realized that there are occasions when payday loans should be obtained and when they should not. You know that although there is an extra cost attached to these loans in the form of interest, the lender is also taking a risk on giving you a cash advance, especially without asking for collateral or performing a credit review.

Don't knock the people that use these loans just because you don't have to

Although payday loan naysayers argue that the lenders in this industry specifically target individuals in low-income brackets, this is exactly why this type of loan service was created. As long as people come across mini financial crises, there will always be a need for payday lenders. And, when it is all said and done, it is the borrower's burden to review the pros and cons and make an intelligent decision in relation to their personal financial situation.