October 8, 2012

Payday Loans Knowledge Base

Payday Loans can be very confusing and so we made this page as a guide to all the most commonly asked questions about Payday Loans.

You might also like to download our totally FREE Ebook – Payday Loans Exposed! – that goes into more detail about payday loans and the best, most trustworthy lenders. It’s not quite ready yet but if you want to visit this page then you can sign up to our newsletter and you’ll be the first to receive it. 🙂

Scroll down and please contact us with any other questions if what you want to ask is not here, we will do our best to help you.

Soon, if you click the title of any of these items, or the read more link at the end of each item, you will be taken to a new page where we go more in depth about in topic. We’re still building the site so please check back in with us often, as we are adding more information every day.

This is a good overview to begin with and we hope it helps you.


Payday Loans Basics


What Are Payday Loans? 


Payday loans are small, short-term cash loans that are designed to act like an advance or sub on your wages. You borrow the money you need now, when cash is tight, and then repay it with interest on your next payday, when your bank account has been topped up.

Payday loans are designed to be used as very short term loans, for emergencies only. If you are looking for a loan over a longer period, there are much cheaper deals around.

Payday loans are used to bridge the gap if you fall short before your next payday. They are available for less than 1 month usually. These types of loans can be a much needed line of credit to people who might not otherwise be able to borrow money anywhere else.

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What Is A Payday Advance?


A Payday Advance is essentially the same as a payday loan. The term “Payday Loan” is used more in the UK, and “Payday Advance” and “Cash Advance” is used more in the USA.

Whatever the term used, they are all describing the process of lending money to someone for a short time, usually less than 30 days, until they are next paid. The company lending will need to see proof of your payday in order to approve the loan.

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What Are No Fax Payday Loans?


No Fax Payday Loans are payday loans that can be applied for and approved online. If you need money really fast, and don’t have any other, cheaper lending options, you should consider this type of payday loan first.

In the past, payday loan companies required customers to fax them a lot of documents, which they would then look at to decide whether to give you the loan or not.

Once a customer had been approved for a payday loan, the lending company would then send the customer a Credit Agreement to sign and fax back.

Nowadays however, in order to make the application process as quick and easy as possible, most payday lenders offer an online application form. This is normally on the front page of the lenders’ website.

You can fill in your basic details and apply for a payday loan in around 5 minutes. You will then receive an instant or near instant approval decision. Most lenders can make their decision in under 15 minutes.

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What are Text Payday Loans?


An innovative company in the UK called Txtloan provides instant short term text payday loans through mobile phone text messaging. There are many other companies offering this service too which we will list on this site ASAP.

You apply online, in the same way as for the no fax payday loans. You have to register, and then be approved.

Once you are approved, you are given a PIN number which you can use to text the company to borrow money. The cash is then transferred into your bank account, typically within minutes.

You are able to borrow £100 at first but this increases to up to £500 once you have built up a rapport with the company. Again, this will vary from company to company.

The main difference with this and other types of payday loans is that once you have had ONE loan from them and repaid it on time, all you need to do for future loans is to send them one text, rather than call or email the company or apply again online.

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What Are Text Payday Loans?

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What Are Payday Loan Lenders?


Payday Loan Lenders are the companies who actually have the money to lend you. These guys are NOT the middle men, they are the direct money people.

The payday loan LENDERS are the ones who either approve you for a loan and lend you money, or turn you down for a loan, and don’t lend you any money.

Each Payday Loan Lender will have slightly different criteria for lending, and we do our best to research each one on this site as thoroughly as possible so you can make an informed decision about whether they are right for YOU.

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What Are Payday Loan Brokers?


Payday Loan Brokers are the middle men. There are HUNDREDS if not THOUSANDS of these types of companies and websites, and you should be wary of them.

The reason we say this is because when you go to a website, you can submit your personal information to apply for a loan, and you would do this in pretty much the same way whether you are on a broker or a direct lender’s website.

The difference, however, with a payday loans BROKER website, is that :

1. You do not know OR have any control over WHICH companies your personal information is sent to.

2. If you are turned down by the first company then the broker will continue to send your information to other companies until you are approved. Too many credit searches decrease the chances of you getting accepted for ANY further credit, so please be aware of this.

3. Some of these brokers will send your details to unscrupulous payday lenders and you can get unsolicited phone calls at the very least, and at worst, serious fraud if you have given your bank account details and personal information.

Not all brokers are bad, however, but you really need to do your research first. Going to a direct payday lender will cut out this risk for you, providing you choose a reputable direct payday lender.

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Applying For A Payday Loan


How Can I Apply For A Payday Loan?


Most payday lenders nowadays have a fast online application form that takes only about 5-10 minutes to fill in.

Some payday cash advance lenders in the USA especially, have physical stores where you can go in person with your proof of ID and income and you can apply there.

By far the most popular and fastest way to get a fast payday loan is to apply online. Once you have done this most lenders can give you a loan decision in under 15-30 minutes.


What Is The Eligibility Criteria For A Payday Loan?


This varies from lender to lender, but for people in the UK, these are the basic requirements to be eligible for a payday loan:

  • To be over 18 years old
  • To be a UK resident
  • To be in full time employment in the UK, earning a minimum of £750 a month after tax
  • To have your wages paid directly into a bank account that has a debit card

If you are reading this in the USA, while the requirements will vary slightly from state to state, (and payday loans are NOT available in all states) the general requirements are:

  • A bank account with your name on it
  • A phone number and e-mail address where you can be reached
  • Proof of income
  • Be at least 18 years of age
  • Employed for 90 days
  • In most cases you need to be earning over $1000/month
  • Payday loans are NOT available to members of the armed forces.

How Do I Apply To Get A Payday Loan?


Providing you fit the criteria listed above, you can visit our information page listing our recommended payday loans lenders or do a Google search until you find a lender you would like to use.

From there, you can either fill in your information online, or in the US go into a store, and wherever you are the websites will have commonly asked questions and a phone number if you would like any more information about that particular payday lender.

Once you have submitted your information, you should have a decision within 30 minutes, often sooner.


What Personal Information Do I Need To Provide To Get A Payday Loan?


You will need to provide some proof of your identity, address and phone number.

It’s also essential that you have a bank account – in the US this is called a Checking Account – the UK, a Current Account – as the lender needs to deposit your loan IN to this account, as well as take your repayment OUT on the due date.

You will need to provide proof that you have a job, and proof of how much you earn. Your last 2-3 month’s bank statements is usually what the payday lenders ask for.

Some lenders might be satisfied with you entering in your salary online, but most will need to see some proof before giving you the loan.


Do I Need To Provide Any Documentation To Get A Payday Loan?


Yes, as we described above, you will most likely have to provide proof of your income. This can probably be done through online banking, and we will call up the main lenders to verify this and update this section ASAP.

You will also most likely have to scan in a copy of your ID and email this to your lender.


Will You Call My Employer?


Most companies will not ever call you at work unless you are unable to repay the loan. Even then, most payday lenders will never disclose where they are calling from if someone other than you answers the call.

So, if possible, when you apply for a payday loan, give your lender a direct telephone number for YOU at your your place of work.

Because you have to BE employed in order to qualify for a payday loan, some lenders WILL want to contact you at work. If they cannot verify your employment then they may need to see a bank statement showing your most recent wage payment.


Personal Circumstances


If I Live In The UK Or USA But Am From Another Country Can I Still Get A Payday Loan?


In the UK, definitely. The payday lender will look at what you earn and providing you can give them proof of earnings and proof of your bank, address, phone and ID then you should be fine.

In the USA, it is likely that it’s fine, but we don’t want to give you the wrong information, so will research this and update this ASAP.


Can I Get A Payday Advance If I Am Self Employed?


No, you cannot we are sad to say. Even if you are able to provide proof of accounts and have a regular self employed stream of income, the lenders we have found so far will not accept this.

Their reasoning, we think, is because a job where you work for someone else, is a guaranteed income whereas when you are self employed your income can vary greatly from month to month.

We will do more digging here and if we find any options we will let you know. 🙂


Can I Get A Cash Advance Loan If I Only Work Part Time?


Yes you can. However, the amount you are able to borrow is directly related to your income, so you won’t be able to borrow as much money as you would if you worked full time.

You also will still have to fulfil the minimum income criteria which is approximately £750 or $1000 / month.


What If I Am Paid Weekly, Can I Still Apply For Payday Loans?


This again is no problem. You will be able to borrow money and only repay it on your 4th payday so long as that is still within the loan term.


Can I Get A Payday Loan If I Am Between Jobs?


No, payday lenders all require you to be in CURRENT employment to be eligible for a payday loan.


Can I Get A Payday Loan If I Am Unemployed?


No, you MUST have a job in order to qualify for a payday loan. However, there are other options and different types of loans that you might want to consider.

It is a bit beyond the scope of this website but when we were researching payday loans, we came across some interesting guarantor loans companies.

However, if you are unemployed, please do not take on any extra debt unless it is absolutely necessary.

We’ve been and some of us still are in debt, and seeing light at the end of the tunnel is SUCH a better feeling than getting into MORE debt with no clear path to get out of it.


Can I Get A Payday Loan If I Am On Benefits, Social Security Or Welfare?


Any honest, reputable payday lender will NOT lend to people on ANY form of benefits.

If you are desperate for credit and have had an emergency and do not get your next welfare or benefit payment for a week or 2, this might seem a really tough thing to say, but it is for YOUR benefit that they will not lend you money.

Benefits are designed to be the minimum amount needed to live on and often they are not even enough for that.

So borrowing money at a high interest rate when you are already on a very limited income, can very easily turn into a spiral where you are never able to get out of the debt.

Most definitely, some people would not let this happen, and if you do an internet search you will likely be able to find some lenders offering this service. Just be VERY careful of their terms and conditions and their interest rates.

We do not recommend any of these types of lenders on this website.


Can I Get A Payday Loan If I Get Working Tax Credits?


Again, as working tax credits are a type of benefit, most if not all main payday lenders will NOT lend to people on ANY kind of benefits. We do not write about any that do on this website.


Can I Get A Payday Loan If I Am Not A Homeowner?


Yes this is fine. There are no payday loans companies that we found who require you to be a homeowner. Payday Loans are based on your job and your income from that job, so if you rent your home that’s absolutely fine.


Banking Circumstances


Do I Need A Bank Account To Get A Payday Loan?


Yes, in MOST cases in both the UK and USA from any reputable online payday lender, you need a bank account to get a payday loan, for 2 reasons:

1. The payday lender will need to deposit your money IN to your bank account.

2. The payday lender will need to take their repayment of your loan OUT of your bank account on the repayment date.

However there is another way which works like this, predominantly in the USA:

1. You visit a shop offering no bank verification payday loans in person.

2. Make sure you are clear about all the charges and how much you have to repay and when, and what any penalties are if you are late with your repayment.

3. Provide proof of ID – either your driving license or passport, verifying that you are over 18 years old.

4. Give the lender a post dated cheque for the amount you are borrowing plus interest, post dated to your agreed repayment date.

5. Make sure you pay back your loan on time. If you don’t, the lender will cash the cheque. If it bounces, you will have extra bank charges to pay, plus most lenders charge you a lot of extra money if you are late repaying them.

Payday lenders make much of their profits by charging consumers late fees when they don’t pay their loans back by the deadline.


Can I Get A Payday Loan Without A Debit Card?


Most online payday lenders require you to have a debit card in order to qualify for a payday loan, but this is not always necessary. So long as you have a bank account with a direct debit facility, some payday lenders will still be able to lend to you.

And as you saw above, you can even give a lender a post dated cheque and apply in person without a bank account, but this is very risky for the lender, and so as a customer it will cost you more money to borrow a payday loan without any kind of bank verification.

We will detail more information about the particular lenders which are OK with you not having a debit card soon. Payday loans companies are becoming more and more flexible about who and how the lend money.


Can I Get A Payday Loan If I Am Overdrawn?


Yes with all the major lenders we have researched and smaller ones too, being overdrawn is not a problem, so long as you have enough money to repay the loan on your next payday.

Please keep in mind though, that if you are already in debt or in arrears we do not recommend you take out further credit, as this will not be helping you with your current financial situation.


Do I Need A Cheque Guarantee Card To Get A Payday Loan?


No, a cheque guarantee card is not necessary to get a payday loan. You definitely will need to have your own bank account, and most lenders, but not all, require you to have a debit card.


Are There Any Payday Lenders That Don’t Check Your Bank?


Yes, there are the very expensive ones where you go in in person and write them a post dated cheque. We dont deal with these kinds of lenders on this website.

All other payday lenders will need to see proof of income. This might not need to be a bank statement but you will need to show them SOME proof of what you earn so they know you are able to repay the loan.

As we said above, it isn’t a deal breaker if you are overdrawn, so long as you are able to repay the loan when you say you will – so if you are thinking that if a payday lender sees your bank statements and sees you are overdrawn, they will then refuse you a loan, this is NOT true.

Think about it. Would YOU lend someone money without knowing when and how they are able to pay it back? This is why they need to check your bank or earnings in some way.


Are There Payday Lenders That Don’t Call Your Bank


Most, if not all payday lenders will not call your bank, as they can satisfy all their criteria for deciding whether to offer you a loan or not without doing so.

They also do not have time to call each person’s bank, and most online payday lenders approve loans 24-7 which of course is not always in banking hours.

The requirements will vary from lender to lender but so long as you can provide them with sufficient proof of income and proof of identity and that you HAVE a bank account, this is fine.


Can I Get A Payday Loan And Put It In Someone Else’s Checking Account?


No, payday loans lenders need to deal directly with the person borrowing the money. The loan is paid into, and the repayment drawn out of, the same bank account and it needs to be the bank account of the person borrowing the loan.


Credit Score And Payday Loans


Do Payday Lenders Carry Out Credit Checks?


Any reputable payday lender WILL carry out a basic credit check, but this isn’t nearly as bad as you might think it is. Lots of people have bad credit and for whatever reason are refused cheaper loans.

Payday loans are actually designed for people with bad credit. Most payday lenders are far more concerned about how much you earn, the fact that you DO have a job, and that you are who you say you are.

Most payday lenders’ credit check is to:

1. Check that you are not or have never registered bankrupt

2. Check that you are not currently being pursued by any debt collection agencies.

That’s it. Some will need to do more checks than others, but that is the basic credit check that will be done. If you are already having problems paying for outstanding credit, you really should do everything you can to avoid taking on any more.


Can I Still Get A Payday Loan If I Have Bad Credit?


Yes you can as we mentioned above. Bad credit is fine, but bad and unpaid and outstanding credit might cause more of a problem.

It’s really tough now, banks were all throwing money at us for the past decade and now even people with good jobs who repay on time are getting penalised.

That is why payday loans can be a great source of short term borrowing if you are responsible with them.


A.P.R. : Annual Percentage Rate


What Is A.P.R.?


A.P.R. stands for Annual Percentage Rate and every single loan company by law in the UK and USA and many other countries, needs to declare their APR on ANY loan products that they offer.

It is a percentage rate that you can use to calculate how much extra money you are repaying, over and above the initial amount that you have borrowed, over a whole year.


Why Is The APR Rate So High For Payday Loans?


This is a very commonly asked question and one the press love to make into a much bigger deal than it actually is.

Payday loans are designed to be used for a very short time, a fraction of a year. Some companies only offer payday loans for 7 days! The usual time is 1 month max – 30 days.

The APR rate is calculated on how much a loan would cost you over a whole year.

So, if you borrow £100 or $100 for 30 days at a cost of £30 or $30, then after 1 month you will repay  £130 or $130. This is high, lots of payday loans companies charge less than this at around £25 or $25 per £100 or $100 borrowed.

Taking the simplest possible calculation, if you have this loan on that same interest rate for 12 months instead of just one month, then you will be charged £30 x 12 = £360 / year. And this is ONLY interest.

£360 as a percentage of £100 is 360 / 100 = 3.6 x 100 = 360% APR.

However if you  do not repay the loan for a full year then ALL of these charges are factored into the loan APR rate. So if you are 1 day late repaying your loan and a company charges £20 for this then that is added on to the APR rate. If they charge you £50 the next day, then by law this has to be factored in to the APR rate too.

So even if you repay the loan when you promise to and never have to pay these charges, by law they still have to be factored into the APR rate for that lender.

All you really need to know is how much will the loan cost you, and what are the charges for both getting the loan and if you cannot repay on time. The APR rate is not an accurate figure to judge a payday loan by as you will NEVER have a payday loan for a full year.




How Long Does It Take To Validate An Application For A Payday Loan?


This varies greatly from lenders to lender and we will be making a comparison table soon on this site which we will link you to from here.

Payday Lenders need to satisfy themselves before they lend to you that you have a job, that you are who you say you are, that you will be able to repay the loan, and that they know how to get a hold of you if you do not repay your loan.

Most need to do a basic credit check that we detail earlier in these FAQs. To apply online takes about 5-10 minutes, and most reputable online payday lenders will be able to validate your application, or not, in about 15-20 minutes.


How Long Will I Have To Wait For The Money Once My Loan Has Been Approved?


Again this varies greatly from lender to lender. Some lenders will deposit your loan in your bank for free almost instantly after you have been approved. The whole process from applying to having the money can take 1 hour or less.

Other lenders can do the same but you have the option to pay extra for this super fast service, or to have a standard bank transfer for free which can take up to 3 days. We will add all this information to our site ASAP so please stay tuned.


How Long Can I Have A Payday Loan For?


Most payday loans are for 1-30 days. Since most people get paid monthly, this is the purpose of the payday loan, to bridge the gap until your next payday.

Some lenders will charge you in a block of time, for example you can borrow some money for up to 15 days and it will cost you the same whether you repay earlier or on day 15 like you planned to. You do not get any discount or reward for repaying early.

Other lenders like Wonga charge you interest by the day so if you are able to repay early then you will not be charged as much as if you repay when you initially agreed to.

Either way, you borrow money for up to 30 days and you are NOT advised to borrow it for longer. There are other much cheaper forms of credit available if you need to borrow money for longer.

Some lenders allow you to roll the loan over so you have an extra amount of time to repay – normally no longer than an extra month. This is not recommended by either us OR the lenders as it is very costly.

If you need to do this then you need to contact your lender BEFORE your loan is due to be repaid to arrange this other wise they will charge you late payment fees.


How Long Do I Have To Cancel The Payday Loan?


A Payday Loan can be cancelled at any time providing you repay the loan in full plus the interest for however long you have had the loan for. It’s not so much a cancellation – just an early repayment.

Some lenders charge per day and others charge per period – so you would be charged to have the loan for any amount of time UP TO that time, say 30 days.

If you take out a loan and agree to pay, say, £25 interest for up to 30 days, if you repay the loan, or want to cancel it early, you will STILL have to pay that £25 back.

Other lenders like Wonga will only charge you per day, so if you originally want a loan for 30 days but then repay it after only 20 days you will not have to pay interest for those extra 10 days.

You are strongly advised to check with the lender BEFORE you take out a loan, about their cancellation policy and repayment charges.


After I Have Repaid The Loan, How Long Will It Take Until I Can Apply For Another Payday Loan?


Providing that you have repaid your first loan in full and on time, you are able to apply for another loan right away from that same lender.

This is NOT advisable though, because payday loans are expensive and are NOT designed to be used as a constant source of credit.




How Do I Know If I have Been Approved For A Payday Loan?


You will know ASAP if you have been approved for a payday loan. Online payday lenders want to make a decision either way about each applicant as soon as possible – so you will generally know within about 20 minutes.

If you are applying online then the website screen will change to tell you that you have been approved, or if you are talking on the phone then the company can tell you that you have been approved for a payday loan as well.




How Do I Receive The Money From My Payday Loan?


Online payday loan applications will deposit the money into your bank account. If you choose to apply in person and take a non bank verified loan then you will receive cash at the store.


How Will I Repay The Loan?


The payday lender will take the money out of the same bank account that they paid your loan into on the agreed repayment date.


Can I Repay The Loan Before The Payment Term Finishes?


Yes you can. You are able to repay the payday loan at any point before it is due. Some lenders like Wonga will charge you less interest since you are having the loan for a shorter time, other lenders will charge you the same amount of money.

You need to check with your specific lender before you decide to take out a loan to see their exact terms and condition.




What Do Payday Lenders Charge To Send Money Really Fast To Your Bank Account?


Different lenders will charge you different amounts for this. We have detailed them all in our payday lender comparison table.

Anything from no cost, to about £12 for a super fast transfer. Please see our lender comparison page for more details.


What Is The Interest Rate On A Payday Loan?


There are many different ways of looking at interest rates. The standard interest rate, APR, stands for Annual Percentage Rate and would be the cost if you were to have a payday loan for a whole year.

The APR rate by law has to incorporate any extra charges and fees, too. So if a lender would charge you £12 to do a really fast bank transfer then this would be added on to the total costs of the loan and would make the APR rate even higher.

The APR figures for payday loans in the UK are around 1700-4200% APR. As an interesting article from Money Saving Expert said, if you think about a bank charging you £25 for being overdrawn by even £1 for 1 day, THAT APR rate was too high for their excel spreadsheet to calculate!

The REALISTIC way to look at the payday loan cost is how much do you have to repay on top of what you borrow? Generally it is £25-30 per £100 borrowed, for up to 30 days.

This will be OK for some people, and too much for others. All the decent lenders are VERY upfront about what they charge so you can take it or leave it.


How Much Does A Payday Loan Cost?


Payday loans from a reputable company will cost you approximately £25-30 ( or $) per £100 borrowed, for 30 days. SOme will charge you an additional fee to send the money to your bank in less than 2 hours.

What you need to be careful of though, is how much each lender charges if you do not repay your loan on time. We detail all this in our lender comparison table, and we strongly advise you look at it before making a decision about any payday lender.




What Can A Payday Loan Be Used For?


Payday loans are designed to be used for emergencies and when you really have no other cheaper options and you really, really need money and have no other way of getting it until you are next paid.

Once you have the money in your account you can really use it for anything you like, but please do not take out a payday loan unless you REALLY need to.

So many people have taken out these kinds of loans without thinking how they will repay them and have gotten themselves into a horrible debt spiral, where they cannot afford the repayment and the interest keeps increasing.

Payday loans are expensive, and for emergencies only. Please remember this.


Can A Payday Lender Sue You?


If you take out a payday loan and have no means of repaying it, most payday lenders will have a standard procedure that they follow. They charge you a late payment fee, unless you contact them first to make an arrangement.

Many charge multiple late payment fees per day you do not repay the loan.

If you are not in contact with them and do not repay the loan then they will pass the debt to a debt collection agency.

All this time the interest keeps adding up for each day you do not repay the loan. You will be able to find full details of what each lender charges on their website and a summary on our payday lender pages.

Not repaying a payday loan is not specifically a crime, and the last thing most payday lenders want to do is to spend time and money taking you to a small claims court for a relatively small amount of money.

If you have fraudulently taken out a payday loan, this is another matter entirely and you COULD be prosecuted if this can be proved.

We are NOT legal advisors so please take this as our best research effort only, but as a general rule, payday lenders will NOT sue you, but you can definitely have huge charges mount up and have debt collection agencies chasing you. It’s really not worth it!

We have written a more detailed article on this which we will publish soon so please read more.


Are There Any Safe Payday Loans?


Yes, of course! All payday loans lenders in the UK have to have a license to lend money and are required to display their charges in the easiest to understand, most transparent manner on their website.

This is the same in the USA and most other countries.

As with any businesses, for all the honest, decent payday loans lenders, there are lots of shoddy, underhanded ones too so please do your homework and check out money forums, online reviews, and just by visiting the website of the company can generally give you a good idea if they are professional or not.

We have tried to list the best and most reputable companies only on this site and do a lot of research for you.


How Much Money Can I Borrow With A Payday Loan?


How Much Money Can I Borrow?


This will vary greatly from lender to lender. When you borrow money from a payday lender for the first time, it will likely be less, and in the range in the UK of £100-500 depending on your income.

Providing you repay this on time, and in full, if you come back and ask for a second loan you might be able to borrow more money, again depending on your income.

Each time you take out a payday loan with the same company there is the possibility of borrowing more money than the previous time, up to a maximum of around £1000 – £1500 depending on your wages, and so long as you have repaid all previous loans in full and on time.

Please bear in mind that you are only allowed to have one payday loan at a time, and cannot get a new loan until the first one has been fully repaid.


Can I Choose How Much Money I Want To Borrow For My Payday Loan?


Yes, when you first apply you choose how much money you need, and how long you want to borrow it for. Each lender will have a maximum amount that they lend in general, which in the UK is about £1000 – £1500.

The lender will consider your salary and decide if they are willing to lend you the full amount you have asked for or some amount less than that.

Please only borrow the absolute minimum amount of money that you need as payday loans are a very expensive way of borrowing money.


What If I Don’t Want To Borrow As Much Money As I Am Approved For For My Payday Loan??


This is an excellent position to be in and please do NOT borrow any more money than you absolutely need with a payday loan, or ANY loan. ALL debt costs money, and the less of it you have the better!

If you don’t want to borrow as much money as your payday loan lender has approved you for then simply tell them how much you DO need to borrow and you can borrow this amount instead. It will cost you less money, which is great.


Can I Get Another Payday Loan If I Already Have One?


We need to do a lot more research into this topic. You are VERY strictly only allowed to have ONE Payday loan at any time from the same lender. You must repay the first loan in full and on time before you are allowed to take out another payday loan from the same lender.

A VERY important question you need to ask yourself if you are reading this is, why do you WANT to have more than 1 payday loan?

You won’t have any money left when you DO get paid, and if you cannot afford to repay one loan and need another one to repay the first one, please try to find another, better way.

If you live in the UK you can call the free, confidential National Debtline or the consumer credit counselling charity, CCCS to get free impartial advice if you are having problems repaying your debts, not just payday loan debts.

We looked for something similar in the USA, but all we could find at first were companies offering ‘no obligation quotes’ and ‘debt consolidation services’.

First, take advantage of Help With My Credit, a resource for struggling consumers created by a group of major credit card issuers, including Bank of America, Capital One, Citi, and Discover Card, plus the MasterCard and Visa networks. We know this site is about payday loans, but, most people who are seriously looking to get a payday loan will also have credit card debt and this can help you.

The service—which is available through both a toll-free number, (866) 941-1030, and a website—offers tips on managing your credit cards, communicating with the card companies, and finding an accredited credit counselor.

Read more: http://www.oprah.com/money/Deal-with-Your-Credit-Card-Debt#ixzz29KkdBUY7

We suspect, but are not 100% sure, that payday companies do NOT cross reference OTHER payday loans companies, to see if you have any other current loans, when doing their initial checks on an applicant. We DO know that they will know if you have ANY other outstanding debts, that have been passed to a debt collection agency.

But we do not think that one payday loans company will know if you apply and already have another payday loan with a different company. Please be responsible with taking on debt.


Extending / Deferral


Can I Have A Payday Loan For Longer Than 1 Month?


There are some companies that offer payday loans for longer periods right from the outset and we will write a special section of this site about these soon. The standard payday loan is for terms LESS than 1 month only.

A lot of companies allow you to roll the loan over to another month, but please try to avoid this if possible. It will cost you a lot more money and you should look to clear the debt as soon as possible, not extend it.


Can I Have My Payday Loan For An Extra Month?


Yes you can but NOT with all lenders, and please do NOT take out a payday loan expecting to have it for 2 months.  Payday loans are designed for a short time of less than 1 month.

When a lender allows you to roll the loan on to another month, this will ONLY generally be if you are unable to repay the loan in full when you agreed to.

As a responsible lender, payday loans companies do not want you to have the loan for a longer time because the more the interest mounts up, the less likely you will be to repay it.

So while a lot of people think that they DO want this because they can make more money, it’s actually far easier for them AND you if you just repay the original loan on time.


Can I Defer The Repayments For A Payday Loan?


Can I Extend Or Defer My Loan Until My Next Payday?


Yes you can with many lenders.The key to remember though, is that the longer you take to pay off your loan the more it will cost you, and since payday loans are one of the most expensive ways of borrowing money, you really want to pay them off as soon as you can.

If you are unable to repay your loan within the initial period or 28-30 days, you MUST call your lender BEFORE your due repayment date if you think you won’t be able to make it on time.

If you do not do this then you will be charged a late payment fee and, depending on the lender, lots more extra fees for not repaying the loan AND not telling them when you WILL be able to repay them.


What Happens If I Can’t Repay My Payday Loan?


What If I Cannot Repay My Payday Loan On The Due Date?


If you think you won’t be able to repay your loan when you promised to, the best thing to do is to call your payday lender and tell them. By law they HAVE to work out a reasonable repayment plan for you rather than just stacking on the charges.

Most lenders allow you to defer the loan for up to 1 month longer, but you normally have to make a token payment on the due date or close to it, even if it is not the full amount of the loan.

Dont’ forget though, that you are still being charged interest on the loan for every day longer you have it, so you really need to do everything you can to pay it off as soon as you can.

If you do NOT call your lender to tell them you are unable to repay your loan on the due date, and you just avoid the situation, THEN you will have late charges to pay.


Do I Have To Pay Any Fees If I Pay My Payday Loan Back Late?


If you call your lender before you are due to repay your payday loan, then you should not be charged a late payment fee. You WILL be charged interest at the same rate as before for each extra day you have the loan until you repay it in full, but there should be no further charges, for up to 1 month.

If you do not tell your lender then yes, ALL of them will charge you SOMETHING for having the loan longer  – the key though, is you MUST tell them if you cannot repay the loan and they will try to work out the best solution for both of you.


If I Am Late Repaying My Payday Loan Will It Affect My Credit Score?


If you contact your payday lender before your loan is due, to tell them you need longer to repay it, this should not affect your credit score so long as you do what you say you are going to do, WHEN you promise them you will do it. Most allow you longer to pay for up to 30 more days if you tell them first.

It is avoiding the situation that negatively affects your credit score. The same with ANY loan – if you do not repay it and do not arrange a payment plan, this goes on your credit record and makes it harder to apply for credit the next time.




Can I Consolidate Payday Loans?


Yes you definitely CAN consolidate payday loans. If you have lots of debt, and are struggling to repay it then consolidating all of your loans might be the best solution for you.

You can normally get your debt down to a cheaper monthly payment, and only have to make ONE payment which makes things easier.

If you are considering this please do a LOT of research into the best thing to do for YOU. You need to look at how much it will cost you over the WHOLE period of the debt consolidation, not just your monthly payments.




Are Payday Loans Illegal?


No, payday loans are not illegal, although there are a few states in the USA where they have been banned due to the high interest rate on the loans. There are plenty of companies lending money without a license, which IS illegal.

However the concept of payday loans is definitely legal .This website is where you can report companies you think might be lending illegally in the USA.


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Warning Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk.