Payday Loans - Who Uses Them

Payday loans are an increasingly popular phenomenon in the UK, with more and more people deciding to take them up each year. They offer a sensible way to manage financial commitments where a bridge is needed to cover a gap in the budget until payday. A payday loan is the kind of short term solution that can help you avoid paying a charge for a late payment on a credit card, missing a rental payment, or paying household bills and expenses that are due before your next salary is likely to arrive. There is usually no charge for arranging a payday loan and the only additional payment required is that for the interest on the loan, which normally amounts to £25 on every £100 borrowed. A payday loan is generally repayable within the month, but it some cases this can be rolled over to the following month.

In terms of who uses pay day loans, this is a fast expanding group. Whilst the pay day loan borrower might traditionally have been seen to be in financial difficulties, in many cases those who arrange a pay day loan now are young professionals with an average income of between £22,000 and £35,000 a year. The largest user group tends to be 20 - 30 year olds but in fact anyone can apply for a payday loan. The only requirements in order to make a payday loan application are that the applicant is 18 years or older, employed and holds UK residency and a UK bank account. There's no difference between the numbers of men and women who apply for a payday loan, as it tends to be 50% men and 50% women.

Of those applying for a pay day loan, the most common amount applied for is £300. In order to obtain this cash, an applicant would first need to fill out an online application form and provide various pieces of information that the lender requires, for example salary details and bank details. At this point, an initial approval is made and the applicant will be required to provide documents such as proof of employment and the like. If the lender requires further paperwork then this can usually be faxed or scanned. After this, the lender will email the applicant with the decision as to whether or not the loan application has been successful and a loan agreement is provided. The applicant can choose to accept the terms of the agreement online and the money is then usually transferred within 24 - 48 hours.

Anyone wants to take out a Payday loan is likely to be in good company as the numbers of individuals signing up for these short term loans is certainly rising. Whether you are looking for £100 to pay the gas bill, or you need a larger sum to meet a credit card bill and avoid late payment fees then a pay day loan is a great option. Used sensibly, payday loans can help you manage your finances and avoid fees and penalties for late payment so that you can save your cash for things you really want to spend it on.