What is the payday loan borrowing process?

The interest rates for payday loans can be very high at some lenders, and the maximum loan amounts will vary. Borrowers should check out the lender’s fees before they apply. It’s also important to understand that every lender is required to carry out a credit check prior to providing quick finance or any other type of credit for that matter.

Traditional lenders generally put a great deal of emphasis on your credit score, often denying loans to anyone with a less-than-perfect credit history. Payday lenders, on the other hand, tend to be more understanding. Having said that, they will still check your credit score, so it’s always important to repay loans promptly as missing payments can harm your credit rating.

While payday lenders will loan money to those with lower scores, past repayment histories can play a role in the amount the lender is willing to provide. Repaying a quick loan promptly will, as a rule, make it easier to obtain short term credit and payday loans in the future. This is why it is so important to ensure you can afford the repayments before agreeing to a loan.

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Representative Example: Borrow £400 for 4 months: 3 monthly repayments of £156.09 followed by a final repayment of £156.07. Total repayment £624.34. Interest rate p.a. (fixed) 288.35%. Representative APR 1,267.9%. 

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Warning: Late repayments can cause you serious money problems. For help, go to www.moneyhelper.org.uk.