Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk. Representative example: £400 borrowed for 30 days.
Total amount repayable is £459.36. Interest charged is £59.36, interest rate 180.5% (variable). Representative 728.9% APR.
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If you’ve never taken out a payday loan before but are considering doing so, you may be wondering about what sort of information is needed to take one out. Whilst some lenders may have slightly different lending criteria and requirements from others, generally the core information that you will be required to provide will essentially be the same. Below we take a look at the main requirements and information needed to take out a payday loan.
Proof that you are over the age of 18
Firstly, you must provide proof that you are over the age of 18. Whilst there is no legal age limit in the UK in which you can open a bank account and save money, there are tight regulations regarding age and borrowing money. Whilst in theory someone under the age of 18 could borrow money from a financial institution such as a bank or payday loan company, the company in question would not allow it. This is because under 18s cannot legally be held liable for such a contract which would make it difficult to take any action should the person in question default on the loan.
Employed with a regular income
Payday loans are now a highly regulated industry which means that all payday lenders have to lend responsibly. That means that as part of their commitment to responsible lending, payday lenders require you to have a regular source of income that you receive every week/month into a bank account. To lend to someone who doesn’t have such a source of income would be extremely irresponsible and could lead to the payday lender falling foul of regulators. Don’t think that payday lenders require applicants to have huge monthly incomes, they don’t. It just needs to be enough to enable you to comfortably pay the loan back.
You must be a UK resident
The third important criteria for a payday loan is that you are a UK resident. Whilst in theory it could be possible in certain circumstances of someone not a UK resident to take out a loan, realistically UK residency is essential. This is because in the UK, it is important that you can provide your last three years address history so that it can be confirmed you have been living in the country and at the addresses you have provided. This is to give the payday lender the confidence that in the unlikely event you were to stop making payments they could find you.
If you can tick all three of these three criteria then you are good to go with your application for a payday loan. Of course just by fulfilling all of these requirements doesn’t mean that you will automatically be accepted for a payday loan. Your credit file may also be checked. However, don’t let that put you off. Unlike banks that have a very inflexible and strict lending criteria, payday lenders have a more flexible and enlightened attitude to lending. Even if you have had credit problems in the past it is still possible to get a payday loan as payday lenders assess affordability more than past credit.