How Long Does a Payday Loan Application Take?
How Long Does a Payday Loan Application Take?
Applying for a payday loan is a relatively straightforward procedure and can really take no time at all. The process time can vary between lenders and the applicant; however in most cases the application process should only take a couple of minutes to complete.
The application is really only one section of the process, as you still need to gain approval and then provide your bank details. Therefore the whole procedure of applying for a payday loan is really split into three parts.
Phase One
The initial application form is filled out by the borrower and sent to the lender. In order to gain approval you need to have provided some basic information.
First of all you need to include personal details such as name, address and age. You need to be a UK resident to apply for a loan, hence why they need your address. This doesn't have to be a mortgage, just a fixed address. Your age is significant as you have to be older than 18 years of age to apply for a payday loan (or 21 with some companies).
Secondly you need to include information about your job and how much you get paid. The reason for this is so that the payday loan company is able to make sure that you will have enough money to actually pay the money back. For example, if you earn 500 per month and had applied for a 1000 loan, your application may be revoked.
It is in your interest to be as accurate with the information as possible, any difference or slight change in details may lengthen the process and could take longer to be approved.
Phase Two
The lender then waits for second part of the application process, the approval. The checks are not as rigorous as with bank loans, and therefore, the payday loan company may only need to take minutes to approve.
The reason these loans do not require as rigorous checks is because of the amount that you can borrow. As they are short term financial solutions, the maximum you can apply for is usually around 1500, but this can differ between lenders. Furthermore, you are only borrowing the money for a short period of time, and so payday loan companies will not need to work out a repayment schedule. Instead you supply them with your pay date, and the money is taken out on that given date.
Considering the checks are not as rigorous, this is why payday companies concentrate on the basic information given such as your monthly salary. They may make additional checks such as whether or not it is your first time applying, in which case you may not always receive the amount you have applied for - this is simply an issue of trust. If it is your first time applying, the short term loan companies may be required to contact you to verify information, or an anonymous call to your employer.
On the whole, this phase may only take a matter of minutes, however if additional verification is needed it may take a while longer.
Phase Three
Once you have been approved a payday loan, you will be required to provide your bank details. This is usually the bank that you receive your pay into. Some payday loan companies may have already requested this information, in which case the third and final phase is simply a case of waiting for the money to arrive. If not, you just have to provide them with these details and the money will follow in a matter of minutes.
You need to make sure this is the account that you are going to be paid into, and it has to be a debit account. This is because, on the date you set, the amount you borrow and the accrued interest will be taken out.
Depending on your status, the amount you have requested and the loan company you are using, the whole process generally takes less than an hour; in some cases can take only a matter of minutes.
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