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FAQ for Payday Loans
What is a Payday loan?
Payday loans are usually small loans for a short term. They are mainly used to cover unexpected expenses between paydays and are repaid when the next payday arrives. They can help a person avoid late fees or have a cheque bounce. Payday loans are not long term financial solutions.
How do I get a Payday loan?
Payday loans are available online as well as in a brick-and-mortar store. In stores, the borrower usually gives the lender a post-dated cheque to be cashed on their next payday.
Online or by mobile device it can take from five minutes to 24 hours to get approved for a payday loan. Once the borrower is approved, the money is deposited directly into the borrower’s bank account.
How much do Payday loans cost?
Payday lenders usually charge a fee. For example, they may charge £24 for a £100 loan. This means £48 for a £200 loan. This works out to more interest than a conventional loan, but they are much easier to get, so the risk is high for payday lenders. They are meant to be short term loans and repaid on the next payday.
How much can be borrowed?
The average payday loan is for £300, but they can be for £100 to £1,000. Some companies offer a lower amount the first time and loan more the next time if the first amount was promptly repaid.
What is a Payday loan used for?
Payday loans are used to make payments on credit cards or other loans, to pay unexpected medical bills. They can be used to pay for anything the borrower requires.
Who is eligible for a Payday loan?
Applicants must be 21 years old or older. They must have full time employment in the UK and earn at least £1,000 per month after taxes. The applicant’s wages must be paid into their bank account for some loans and they must have a debit card for that account. For loans online, a mobile phone may be required to receive a text code for finalising the application. Applicants who are unemployed will not be approved for Payday loans.
What personal information is needed to give?
• Name, date of birth and address
• Telephone number and email address
• Work and salary details
• Bank account details
How does the company approve the Payday loan?
With the information on the application, the company will verify the applicant’s identity, to avoid fraudulent applications. They will assess the applicant’s credit worthiness and determine if they can afford to repay the loan on their next payday. They will also contact the Credit Reference Agencies for credit fraud prevention searches and checks.
Will my credit rating be affected?
If you repay your loan on time, your credit rating could be positively affected. However, if you fail to repay the loan on time and don’t arrange another payment plan, your credit rating could be negatively affected.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk. Representative example: £400 borrowed for 30 days. Total amount repayable is £459.36.
Interest charged is £59.36, interest rate 180.5% (variable). Representative 728.9% APR. GriffonLoans.Co.uk is a registered trading name of Hellcat Media Limited
which is an Introducer Appointed Representative of Quint Group Limited, who are a credit broker not a lender.