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Who is eligible for a Payday Loan?

Several things dictate who may receive a payday loan, and who may not. Various lenders have different rules and standards, but the rules that are universal include: you must own a bank account, you must be employed (with the loan paid into the same account into which you receive your salary), and you must be at least 18 years of age.

As a solution to short-term cash flow problems, payday loans are simpler to execute than ordinary loans. More often than not a decision as to whether you are eligible for a loan will be made instantly, and will receive the money within one day. Due to the fact that obtaining such a loan is relatively straightforward, there has recently been a marked increase in the volume of applicants for them.

However, not everyone is automatically eligible for a payday loan. Although the credit checks (if credit checks are used) do not tend to be as strictly carried out as they would be for a standard loan, limits are still defined by lenders to ensure that the people to whom they provide payday loans do not fall into trouble by not being able to repay the loan.

Therefore, you are not eligible for a payday loan if you are under 18 years of age. This is because by law persons must be over 18 years old in order to receive credit. This restriction does not just apply to payday loans, but to all forms of credit. Applicants must also possess a valid bank account in his name, which must have a debit card attached to it and which must be registered in the country in which the payday loan application is being made. Applicants are also obliged to already be receiving a regular source of income into the bank account into which they wish the payday loan to be paid. The concept of payday loans is that it is repaid, along with interest and loan fees, the next time that you are paid.

In this case, it is vitally important that the borrower is able to repay the debt in full within the stipulated time-frame. Therefore, you may not be eligible if you are not able to prove that you are currently receiving a regular form of income.

Certain, but not all, payday loan providers stipulate that the sum that you earn each month must be above a set amount (although they do not advertise this requirement). If you are only working part-time, or are on a modest salary, there is the likelihood that you will be refused a loan. This regulation goes to ensure that companies do not lend money to those who are not in a position to pay it back.

These factors mentioned above constitute the basic requirements, but companies have devised unique methods for deciding the fate of each individual loan application. Most lending companies run credit checks, in order to gain an idea of an applicant's financial situation.

Although these credit checks do not tend to be as comprehensive as checks used for other types of loan, those who have unhealthy statuses are bound to be refused.

As previously mentioned, the majority of lending companies ask each applicant about their monthly salary.