How Does a Payday Loan Application Work Online?
If you apply through one of our featured lenders, you will be required to fill in a few details to proceed with your application. The lenders that we promote offer the complete application online and some will allow you to apply over the phone. By provided that you have access to the internet, you can apply with the lenders we feature on all devices including mobile, desktop and tablet.
A typical payday loan application usually takes around 5 minutes to complete and the first question usually involves how much you wish to borrow. Next, you will enter some basic details including your name, age and residence. Applicants will be asked to enter their employment details whether it’s full time, part time or unemployed. In addition, you will be asked to enter your monthly take home salary and the date that you get paid. This is an important check so that lenders know how much you can afford to borrow and by confirming your pay date, they can collect repayment from your account effectively when there are funds available. The final stage is usually to enter your bank details – this is so the lenders know where to transfer the funds to and where to collect the repayment.
Types of checks that they run
Payday lenders usually have automated processes to run hundreds of checks when you submit application. This allows them to determine whether you are eligible for a loan or not in just a matter of seconds. The types of checks include:
Basic criteria – this is the standard criteria that the lenders has such as customers must be over 18 years of age, living in the UK, in current employment and earning a certain amount. proceed to the next stage.
Credit Checks – more and more payday lenders are running credit checks as part of the application process. By running a credit check using the likes of Experian, Equifax or CallCredit, the lenders gets an indication of how well the customer has repaid other forms of credit in the past such as previous loans, mobile phones, mortgages and credit cards.
Each customer has their own credit rating based on their history with 350 being the lowest and 850 being the highest. The higher the score, the better the customer’s credit and a lender may select a particular score as the cut off. For applicants looking for bad credit loans, it is noted that not all payday lenders run credit checks. Instead, they look at things like employment, age and previous loan history with the company to make their decision and they may charge a slightly higher rate to allow for the risk. Be sure to check the information we provide about the lender to see if they run credit checks or not.
Affordability – this refers to matching the amount that customers wish to borrow and what they can afford to repay. It is important that lenders take a customer’s affordability into consideration to ensure that they do not lend them too much and therefore they are unable to repay their loan. Examples of affordability measures including asking how much the customer earns each month and requesting a pay-slip or bank statement to confirm the individual’s salary. Other measures include questions regarding their monthly expenditure such as monthly spend for rent or credit cards and this allows the lender to get a better idea of one’s finances.
History/Trust Rating – payday lenders typically have trust scores for repeat customers so if you have been granted a loan previously and repaid on time or missed repayment, this will be taken into consideration for your next loan. Naturally, customers that have repaid before on time are more likely to be eligible for another loan and sometimes they have the option to apply for higher amounts.
How quickly can the funds be transferred to my account?
The lenders that we feature can transfer funds on the same day. Depending on the lender, some will be able to pay the funds into your account immediately, in less than an hour or the next working day.
There are lenders that we work with that can send the funds to your account instantly but others require further checks such as speaking to the customer of the phone to confirm details or requesting documentation to confirm salary and employment before transferring funds.
For most lenders, you will be required to ‘electronically sign’ or ‘Esign’ the loan agreement before completing the process. This involves signing the online contract but to avoid printing it off and posting the document, you will receive an email and SMS code. Simply click on a special link in the email and it will show you the loan agreement and ask you to enter the SMS code that you have been sent. This verifies that the loan belongs to you and is the final part of the loan application.