The new payday loans are a radical departure from some forms of existing borrowing.
Here’s a quick summary as to how:
Unlike some conventional borrowing, payday loans do not necessarily require you to have an excellent credit history before approving an application – you’ll see why below;
The sums they make available are modest in comparison to other loan types but this means that the risks for potential lenders are smaller – that’s why they may be far more understanding of credit history problems and less inclined to refuse applications;
They are designed to fill a niche in the marketplace – people that have an urgent requirement for a smaller loan (for any purpose whatsoever) until they next get paid;
New payday loans are also designed to be fast and this means that they have a streamlined online application process – no more need for faxes and conventional mail delays and you’ll typically be able to receive a very fast (possibly instant) response with a yes/no answer;
Of course, a fast decision is very helpful but what may really count is how fast you can gain access to the cash if approved – the good news there is that some providers may be able to make an immediate credit payment into your bank account so the money will be available for you to use within a very few hours of your first application (though not all loan providers may be able to offer this facility);
These loans are also not intended to be repaid over many months through multiple individual repayments – they are designed to be much more simply repaid in one go, around the date of your next payday (which is why they’re called payday loans);
Some providers may make the repayment process simple as well – you only have to ensure that you have sufficient funds in your account to cover the sum agreed (essentially the original loan plus the provider’s charges) and they will debit your bank debit card on the agreed date, which will repay and conclude the loan;
Although new payday loans are principally designed for smaller amounts, perhaps up to £1000 may be available to help deal with things such as an unexpected crisis.