Community

Understanding Payday Loans And How To Choose Lending Platforms

Emergency financial needs may surface in between paydays and because of no prior planning, they can stress you up. Also, some bills may fall due when you least expect and thus necessarily to look for a stop gap financial measure to get you through the obligation.

Posted on

This is essentially what payday loans do; they bridge the gap between one payday and the next. In terms of size, these loans may range from 100 pounds to about 1,000 pounds, just enough to see you to the next payday.

Practically, you cannot depend on these loans to finance your investments because they have short payment duration and their interest rate is a bit high compared to other structured financial instruments. Payday loans are best suited for emergencies and short term needs. They are convenient because of the short processing timeline.

What to Look For in Payday Loan Platforms

Because of the increasing need in this lending niche occasioned by the cost of living and uncertainties of life, there are lots of platforms that have come up to offer payday loan facilities.

The modes through which these platforms operate differ with some being the direct lenders while others being a conduit connecting you to potential lenders. Whatever the case may be, there are some things that you need to bear in mind before choosing a platform.

The Eligibility

Generally, payday loan platforms ascribe to similar eligibility criteria, but you should individually check with each platform on what they require from you if you are to qualify for payday loans.

One of the aspects to look at is age. Many payday loan platforms in the UK require that all loan applicants should have attained the age of 18. Also, the residential status is another eligibility criterion to consider. Permanent UK residence is often required when applying for these loans. Finally, most platforms will ask you for proof of employment and a salary of at least 750 pounds before accepting your application.

The Application Process

Once you confirm the eligibility, the next area of focus should be the application process. Ideally, the process should be simple and take a short time to complete, not more than 24 hours. In the application process, you should confirm beforehand the kind of documentation they require and any paperwork that you may have to fill.

Some of the documents required may be bank statements, Social Security cards, government-issued photo identification, and a pay stub.

The Loan Limit and Repayment Terms

When considering a payday platform, you should look at the loan range. This is the minimum and the maximum they lend to individuals. You should also look at the repayment pattern in terms of the time, the frequency of installments, and their size. This will enable you to decide whether you can meet the conditions or not.

The History of the Platform

You do not want to be a victim of ignorance and as such you should take time to dig through the profile of the platform. Find out the number of applications that have successfully gone through the platform, the kind of technology they use in matching your application with potential lenders, as well as the security of any data or information you submit to them.

Most payday loan platforms will conduct a credibility and an affordability check so that they can be sure you can pay back the money loaned.

This post was created by a member of BuzzFeed Community, where anyone can post awesome lists and creations. Learn more or post your buzz!