Payday loans have become very popular in recent times. They are a practical alternative to personal loans for those who are not eligible for the latter and payday loans are often the only solution to pressing problems that require immediate solutions.
Payday Loans: Explained!
Payday loans are short term loans, usually of a small amount. The loans are designed based on the concept of repaying the loaned amount with interest on the day the borrower would get paid next. In other words, the repayment is on the next payday which is also the reason behind the naming. Payday loans are unsecured loans for people with poor credit. Since the loan is unsecured, there is no need for any guarantor or collateral. No security needs to be provided to get such a loan.
However, one must be employed to get payday loans. Unemployed people or those who cannot furnish the proof of income will not be eligible for the loan. Categorised as personal short term loans, payday loans do not require credit checks. The loans are approved based on the income of the applicant which subsequently determines the ability of the applicant to payback. However, there are exceptions.
Payday loans are very easy to get and they can be paid back in one lump sum payment, over a period of a few weeks to several months. Payday loans can be obtained for as little as hundred pounds or for as much as two thousand pounds. First time applicants would be eligible for small amounts, usually based on their income and repaying ability. Compare loans in UK and you would qualify for only a few hundred the first time you borrow. Cash Kitty is more generous with applicants having the deemed ability to repay on time.
Short term loans that you would be repaying on your paydays are often applied for and approved in a matter of hours, if not sooner.