What you need to know about payday loans

Payday loans are short term loans that are designed to help out people with an urgent financial need. Payday loans are usually paid back in a single lump sum option, but this depends on the agreement between the recipient and lender. You may choose to customize your payday loan repayment to fit your payment plan without inconveniencing yourself. Payday loans take a short time to process and the funds are almost remitted to your account just as quickly. But how does the process work?

The application form

After carrying out some research on the ideal payday loan options available, you will find the specific lender’s website and proceed to fill in certain required details. Usually, most lenders will require some financial and employment details as well. Some lenders may require additional financial details such as a breakdown of your income and your credit score.

The form is usually detailed, but is much less in-depth than that involved with other loan options. Some lenders do not even require your credit score to give you a payday loan.

The personal details help to verify you, and to help locate you in the event that you default on payment. The financial information provides a link through which the payday loan lender can send money and receive remittance without needing a face-to-face interaction.

Filling this form takes a short amount of time. If you are using a payday broker, this form might be sent to a number of lenders.

Approval and deposit

Lenders verify your information by checking up with your bank. They will follow through to corroborate your employment record and income levels. The few lenders who check on your credit score will do so at this stage, in co-operation with your banking service. They will then approve the loan and contact you for a payment plan.

Once the loan is approved, the lender may transfer the amount in bulk into your bank account or mobile money platform, depending on the agreement you have with them.

Some lenders employ a specific deposit time, at which your money will be deposited to your account. For efficiency, these lenders usually have more than one payment times within the day.

Depending on your bank’s rate of receipt and payment, your money could be ready for use within a few hours.

How to make sure your application is processed quickly

Quick loans are appealing because of the speed of processing. They can help you out in an emergency. To make sure that your quick loan is processed quickly enough that you can still use it to fix your emergency, here are a few things you could consider doing.

Provide accurate information in your application process to prevent any delays when the lender checks up on the information.

To find out the dos and don’ts of payday loans, check out our blog on it here.