You know that payday loans are very popular. The loan process is quick and simple and borrowers can take loans as many times as they want. However, before you actually take a payday loan or a cash advance loan, you would like to know a little more. We’ve compiled a list of the most commonly asked questions about payday loans and how they work.
Should I apply for a payday loan?
Can I use my payday loan for anything?
The paydayloans online company will not ask the reason for the loan. They just check your salary slip to ensure that you can repay the loan when it becomes due. As soon as the loan is sanctioned, you can withdraw it and use it. This is completely different from bank loans. A bank loan officer will usually check how you are spending the loan amount and they may ask for a yearly audit to ensure that the loan amount is used legitimately.
How much can I borrow?
The exact amount will vary considerably. You can request an amount when you are filling in the application form. The payday loan officer will compare your request to your income and then decide on a certain amount. Generally, the loan amount may extend to about 60% of your paycheck. You can choose to ask for more or less but the loan officer will decide the amount. First time borrowers are limited to a small amount. When you repay the amount, your trust rating increases and you can borrow larger amounts from the paydayloans online company.
How does the repayment process work?
The repayment process can be through checks, debit cards and even direct withdrawal. The repayment date is decided at the time of sanctioning the loan and it will be clearly communicated to you verbally by the loan officer. The repayment date is also listed on the home page of the paydayloans online website and the first page of your contract.
Do I need a credit check?
No, credit checks are carried out by banks to verify the financial stability of customers when they apply for long loans. Payday agencies do not check your credit history as they offer short-term loans.
Generally, how much will I have to pay in the form of interest?
The APR rates or annual percentage rates of each website will be different and you are free to find a rate that you like. However, new rules have now put a cap on the APR rate that is applicable in the US and UK. On an average, you may have to pay £25 as interest on every £100 that you borrow. We recommend that you check APR rates of the paydayloans online websites before you apply for loans.
Can I take two or three payday loans at the same time?
No you cannot take multiple payday loans at the same time. Paydayloans online companies have a clause in their contract, which is applicable on their customers. This clause states that you cannot take simultaneous payday loans from multiple companies. Doing this could get you blacklisted as a scammer.
We hope that these questions have helped you make an informed decision about payday loans. If you have additional questions, make sure you get in touch with the customer representative to clarify them before taking a loan.