Who Can Apply For Payday Loans?

Payday loans are usually only offered to a select group of people - and whilst there are specific criteria as to the amount of money that you will be able to access, and how long you’ll be able to access it for - this criteria is surprisingly broad.

In this article, we’ll take a look at the market that payday loans are targeted to - ultimately to see whether or not it would be worth your while to take the time to investigate applying for such a finance facility.

Salary Only

One of the most obvious restrictions when it comes to payday loans is that only people who are on a salary are able to apply for one. This seems obvious because the whole idea of a payday loan is that it is money given in advance (in lieu) of a salary payment being made. This means that if you don’t have a salary - there is nothing to secure the payment against, and therefore whatever financing facility you get isn’t a payday loan.

When it comes to the salary that you are on - there are a few considerations that are taken in to account when determining how much you are able to get from a payday loan. These include:

• How much your salary is
• How often the salary is paid
• Whether you are currently working full time, part time, or casually
• Whether you have a contract with your employer or not

Each of these factors will in some way influence the amount of money that you will be able to get in advance with a payday loan. Additionally, some of this information will help to determine what interest rate you will be required to pay on the loan that you receive.

Calculating The Interest Rate on Payday Loans

Deciding upon what the interest rate will be for your payday loans is probably one of the hardest things for you (and the finance company) to do. This is because there are so many variables involved that it makes it difficult to put your finger exactly on the right amount.

Because the idea of a payday loan is that you will repay the outstanding balance when your salary payment is received (which might only be in a few days) - the interest rate is not the only fee / charge that will apply to your loan. We will go in to more depth on other charges in another article.