Payday loans are the most popular form of loans among unsecured loans. The private lenders provide unsecured loans, mostly on high interest. Payday loans probably have the highest interest ratio in the market. These loans work in a unique fashion. The borrower visits the payday lender along with the credit report. The lender, who is usually an unknown individual, evaluates the credit report. Most of the payday lenders reject loans applications with credit history of recent bankruptcy.
A borrower negotiates with the payday lender on APR and receives approval. However, the approval process is not simple on the lender’s end. The lender, an unknown person, has only one document to evaluate the chances of loan repayments and that is your credit report. If you believe that the lender receives loan applications with bad credit score only then you are wrong. When you repay all loans, your credit score gradually falls. People with excellent credit score take payday loans to maintain their credit score. This means that the lender receives credit reports with good, sometimes excellent credit score also. Therefore, the lender’s question about the reason of lending you money is quite valid.
Considering this scenario, it seems that the chances of approval of your payday loan application are low. However, you can get your application approved, and that too on your own terms, by following the given tips.
Be Very Honest About Your Income
The payday lender will look up your monthly income as well as the steadiness of your job. If you change your job frequently, chances are that the lender will reject your application. The lenders prefer £1000 of minimum income for accepting a loan application. Some payday lenders require at least three months of employment history. Sometimes, the lenders approve long-term payday loans on the term of submitting the statement of your monthly income regularly.
When you submit your income honestly, you can evaluate your eligibility to sign up for a payday loan. Understanding the requirement of income type is also important. Some lenders do not consider changing incomes like the money earned from freelancing. They consider the permanent income obtained from your steady job.
People obtain all types of loans as capital and return them as the sum of capital and interest. However, many people fail to repay the loan amount when they find the ratio of capital with their income, and not sum of capital and interest with their income. If the capital of payday loan is £400, the interest is 20% i.e. £80, and fees are £30, then the borrower obtains £400 but returns £510. If you calculate your affordability based on the amount that you receive i.e. £400 then you will not be able to return the remaining £110.
The need of payday loan is increasing in the country due to high cap rates of other loans. In contrast, the government is introducing new rules and regulations to avoid payday loan scams. Google has recently eliminated payday loan ads from the websites.
The payday lending business has become more complex for the lenders. They can witness the increasing demand of market but they are also worried about borrower scams. Therefore, the lenders prefer the borrowers (and sometimes offer discounts) who provide them correct information and deal with payday loans responsibly. If you have a steady permanent job with good income and your age is 18+ then chances are that you can easily get a payday loan. On the other hand, if you tell a lie about your income or age then the lender will immediately reject your loan application. Use the photocopies of your legal documents to provide proof of your personal details. For example, show the ID card to confirm your age.
Most of the lenders obtain the credit reports from creditors. However, the lenders trust the borrowers who bring their authentic and recent credit reports. A copy of your credit report is an essential part of the documents. You can get a free credit report copy from Equifax. Otherwise, visit Equifax and capture a photograph of the credit report to show it to the lender.
Find the Right Platform
Many payday lenders establish online companies. They lend money within 24 hours via online money transfer processes. However, the borrowers cannot negotiate with the lenders online. The lender will require you to fill a form after logging on the website. The form will contain some basic information, credit information, bank account number, income details, and such. Most of the online payday lenders approve the loan applications because they offer the loan on high interest, which is usually equal to the interest offered in physical payday offices. The payday loan interest could be as high as 20% of the capital.
There are two problems in this case. Firstly, you cannot negotiate with the lender. Secondly, the interest rate is high. However, your application may be rejected if you choose the physical space office. The right solution to this problem is to visit the unit, which provides a comparative analysis of the payday lender rates. By comparing the rates, you can choose payday lenders with lowest interest rates. Furthermore, the chances of loan application rejection also reduce when you apply directly to these lenders. Quiddi Compare is the right platform to compare the rates of payday lenders and lenders of all other loans. Visit the website to get more information about payday loans.