How Payday Loans Work
Unlike secured loans where you need an asset for security, payday loans are unsecured thereby not needing any collateral. To be eligible for a loan, all you'll need is to meet the basic requirements which include proof of identification, proof of employment and probably a recent bill when requested by the lender.
Application for payday loans is also mostly done online nowadays. You can complete an online form, hit submit and wait for a response within minutes. Even better is the popularity of same day loan approval where you can expect to get your money within the same day.
Because the loan is unsecured, the loan amount is smaller but still flexible. Most lenders offers range from £100 to £1,000 at typical terms of up to 30 days. When you borrow money in the form of a payday loan, you are expected to pay for it in your next pay check which is usually automatically deducted from your debit or bank account as stated in your lender-borrower agreement.
In cases when you think you can't make the payment or you can only afford to pay half of you due, you can speak with your lender to make new arrangements. This, however, will entail additional costs which can add up if you continue to rollover time after time.
To make the most of the loan, you’ll need to stick with borrowing small then paying it on time just like what every responsible borrower does.