Ever wonder how tough life gets as a family man or a working student? It is a given fact that we don’t just enjoy being a grateful individual on earth because whether we like it or not, there are those times when fate unwelcomely measures our ability to handle situations and sometimes empties our pocket in a blink of an eye. In this playful world of needs and wants, having a very tight budget can be so frustrating. We tend to stretch our resources out, push ourselves too hard to work harder and even sell our stuffs at home just to survive financially. Sometimes we also seek temporary financial assistance to certain companies that lend money with interest.
Money lending exists nowadays but the most commonly sought for is payday loans. The western culture started the payday loans but it grows rapidly throughout United Kingdom market for over the last five years, giving hope and aid to those who want to avail it.
What is a Payday Loan?
Payday loans, unlike any other traditional personal loans, they only extend a comparatively small capital with a maximum amount of £500 in a short-run, mostly due on your next payroll deposit. A distinctive payday loan in UK normally interests £25 for every £100 borrowed, meaning a £100 loan would become £125 to be repaid after a month. Actually, there are no legal restrictions in the percentage of interest of the loan, only the company or the lender can charge it, but the finance charge of the loan may only range from 10% – 30%.
There are different variation of loan features but payday loans were built to be paid off in one payment, normally until payday but interest-based payment or what we call, rollover is the most common option for the borrowers. The payday loan is built to be more accessible to anyone who is in need of temporary financial aid and repayable in installments through a prolonged period of time. Failure to pay your loan on the given due date will allow lenders to sell your account to a collection agency (third party), you wouldn’t want that to happen since those agencies where known to be forceful both to the guarantor and the debtor.
How to Apply for a Payday Loan?
The requirements needed in able to avail a payday loan depends on the lender’s necessity. But mostly, lenders will require relevant personal identification and financial data that would qualify you as a borrower and process your application. The lender would offer hassle-free application if the borrower’s loan would not exceed over £500 and would typically request a credit account as to check and decide a release for larger amount of money to be loaned.
Common requirements in applying for a Payday Loan:
- You don’t have to be employed but you must provide data that would certify your financial stability on your recurring income
- You must be at least 18 years old and must be a resident of the sovereign state you choose your loan application
- You should have an active checking or savings account
- Provide 2 or more valid identifications
- You must provide an active phone number and proof of your residency in the said state
- You must not be involved in any bankruptcy, if so, then immediately file for bankruptcy relief
Borrower’s Responsibility
It is known that payday loans are temporary financial aid and it is indeed a great help in an emergency situation. This kind of money lending might come in very handy but there will be consequences which is the interest and the payment due date. The least that you want to avoid is the failure to pay your debt since it will create certain implications to you financially, because the lender will add up on your interest and the greater the value of your debt, the more difficult it gets for you to meet the payment, especially when your income is just enough to provide your daily needs and responsibilities. So, to be able to avoid any implications, a borrower should promptly pay his debts on or before the due date.
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