Payday loans have recently gained popularity, especially in 2020, when people went through difficult financial times. Any person in financial need can apply and receive a payday loan as long as they prove their ability to pay.
With same-day payday loans, you can borrow small amounts of money starting from 100 pounds or less. A borrower can apply for a payday loan from the numerous online lenders. Payday lenders become important partners in time of need because borrowers do not need to have an account with them to apply for a loan.
What is a payday loan?
A payday loan is a loan borrowed on short notice from a payday loan lender. Mostly, the borrower fills a simple loan form online and the loan is approved and processed within a very short time. The repayment period for a payday loan is usually 30 days.
The loan is available to any person who can prove to a source of income whether from employment, freelancing, business, insurance, retirement scheme, manual work and so on. The loan is given in small amounts which are increased according to the borrower’s ability to pay in time. There are many good reasons why people apply for a payday loan.
Payday loans are processed fast
Payday loans are a fast way to receive money from a lender. Majority of payday lenders transfer your loan within a few minutes or hours after your application is approved.
If you want same day payday loans, ensure you provide all the required information during the application process. If your lender rejects your application, they will inform you fast so that you can look for another lender online.
The process of application is also fast and you are only required to fill a simple form online and attach all the necessary documents. The processing period is way too fast compared to the traditional banking system, which can take up to 14 days.
Your upper borrowing limit increases as you faithfully pay
If you borrow and pay your payday loan within the agreed time, the lender can decide to increase your loan limit. The higher limit is subject to you proving that you still have a source of income and can be able to pay a higher amount of loan on time.
Most lenders will loan you a small initial amount and then continue increasing the limit steadily. The maximum limit can start from 100 pounds and gradually increase to 200, 400, 600 and so forth. To the borrower, this increases your credit score with the credit bureau. Remember that if you are not honest in your dealingsl, you lose your chances of borrowing more.
Payday loans are convenient
A few years ago, you needed to visit a payday office to apply for a loan. Because of improved technology, payday lenders are moving away from hard copies to softcopies. You can conveniently apply for a payday loan from the comfort of your home, office, car, or wherever you can be when the need for a loan arises.
After you apply for the loan and it is approved, you receive your loan in cash deposited directly into your bank. You do not need to make a journey to the lender’s office to collect your check, then wait another two days for maturity.
That means you will have instant access to your loan and use it for the intended purpose. Most traditional lenders will require you to visit a branch near you and follow a tedious application process which might fail to be approved.
Payday companies are well regulated
There is a myth that payday lenders charge whatever amount of interest they want. When the industry was young, there were no rules to regulate the issuances of loans and recovery processes.
Later, the industry began to grow fast and the Financial Conduct Authority came in and set strict rules to regulate the industry. Today, the lenders are guided by law and they cannot charge you more than the maximum interest allowed by law.
If you fail to pay in time for any reason, the lender cannot come banging at your door to demand their money. There are rules and protocols to follow when applying for a loan and when recovering. Lenders do not need to fear because the industry is well regulated and if any lender has a complaint to make, they will have 100% access to the regulator.
Payday lenders ask for limited paperwork
When applying for a payday loan, you will not be asked to download forms and take them for signatures from your employer, lawyers, parents, partners and so on. Your lender will ask for very few documents from you like your identification, proof of income, bank account number and your email address.
These are documents that are always with you in your bag and you can scan them and upload online. This is different from traditional lenders who will ask you for lots of paperwork, some of which take longer to fulfil.