The ‘unsecured personal loan without guarantor’ is a reliable and anytime financial help for the Irish community passing through the temporary phase of financial uncertainties. The majority of Irish households rely on the private direct lending agency to get immediate cash help. Over the years, the private lending agency has become the preferred choice rather than regular banks and traditional Govt. operated financial institutions for getting an easy loan because private lending agencies are less bothered for borrower’s financial straits. The vast array of short-term unsecured loans is available online, but payday loan is the most sought after same day financial help in Ireland.
What is a payday loan?
A payday loan also called salary loan, payday advance, payroll loan and cash advance loan is a small amount unsecured loan for the salaried people. The credit is made only for a maximum of 28 days or up to the next payday. A borrower has to pay the entire amount in a single instalment. However, some direct lenders have started offering the payday loan with monthly repayment facility also. The high-interest rate is the biggest hurdle for the financially crippled borrowers, but the facilities make it the top choice to manage short-term financial needs.
Why Do People Apply For Online Payday Loans?
The ‘need’ is the key driving factor for borrowing. Eight key reasons common for Irish salaried community to take payday loan despite the high-interest rate and APR are:
- Convenience – The online process makes availing this financial help the easiest even for the first time borrower without involving any broker.
- Less documental Requirements – As the complete process is online, you need to fill up just an online application form. The served details are verified by the lender itself.
- Speed – This financial help is provided the same day at lightning speed because the lender needs just the verification of salary, age, and registered address; and, it is a matter of minutes to complete the check and sanction the approval. The funds are transferred the same day or by the next day.
- No collateral required – As it is the short-term unsecured credit against monthly salary, no collateral is asked by the lender. In case of failure in paying the loan on time, your asset is safe.
- Short-term commitment – This loan type doesn’t come with long-term commitment as the borrower becomes free from repayment responsibility within 28 days. There are fewer chances of failure because of less possibility of lower or no income during the period.
- Good for Temporary Budgeting Hiccups – Salary loan is right to manage the temporary budgeting hiccups posed by unexpected developments like care fault, urgent home roof repair, fantastic tour, unplanned purchase etc.
- Rebuilds the credit score – As most of the time, a salary loan is paid on time, it makes you a good borrower. Each on the time repayment rebuilds your poor credit report.
- Available for bad credit holder also – When all the banks and financial institutions deny for lending because of bad credit score, direct lenders offer payday loan to bad credit borrowers also taking the forthcoming salary as the security against the credited money.
What Is The Difference Between A Payday And Short-Term Loan?
The numbers of agreed monthly repayments make the big difference between a payday and short-term loan. The payday loan is a single repayment loan while the short-term loan is sanctioned up to 12 months. The annual percentage rate (APR) of payday advance loan is very high even more than 1000. Short-term loans are made at lower APRs. In case of a payday loan, the lender doesn’t consider the credit score, but in case of short-term loans, credit score plays an essential role in fixing the interest rate and other terms and conditions. The payday loan is a small amount unsecured credit, while the short-term loan may be secured and unsecured both; the loan amount is decided according to the repayment capability. The payable amount for a payday advance loan is determined just by taking home salary. Generally, the maximum limit of payday loan is £1000; while there is no cap for short-term loans.
How do Payday Loans Work?
A payday loan is available only for the salaried borrowers; even the self-employees can’t get this facility. The salary account is linked with payday loan because the amount is credited to a salary account. The lender has the authority to withdraw the due funds on the due date as allowed by the borrower under the agreement. Each payroll loan is reported to credit reference agencies like Equifax, Callcredit, Crediva and Experian whether the loan is paid on time or not. Some direct lending agencies, dealing in payday loans, don’t share the credit details with CRAs; such lending agencies advertise for offering “no credit check payday loans”; naturally, as the risk becomes high, interest rate also goes up. Many Payday lenders charge processing fee also; that may be around £20. The borrower applies online, and the approval is sent within 30 minutes or even earlier; if the terms and conditions are agreed, the fund is transferred to bank account.
Are Payday Loans Unsecured?
Yes, a payday loan is short-term small amount unsecured loan. However, you have to repay the entire amount on time; otherwise, legal action can be taken by the lender as in other loan cases.
How Do Payday Loans Differ To Other Loan Types?
The variety of personal loans provides more than enough options to chose the best suitable for getting the same day financial help. The popular personal loan types are debt consolidation loans, small installment loans, bad credit loans, car loans, unsecured loans, guarantor loans etc. When other loans are available for the months, the payday loan is made available only for 28 days. The interest rate of other personal loans is comparatively lower. The profession also doesn’t matter in other than payday loan processing, but credit score matters a lot while the importance of credit score in case of payday loan is less. The repayment period of secured or unsecured personal loans can be fixed as per convenience, but the borrower is bound to repay the borrowed money in a single installment.
What Can I Use A Payday Loan For?
You are free to use the payday loan amount anyway; however, as it is a high-cost financial help, you should use the amount only for the justified purpose.
Are Payday Loans a Scam?
No, payday loans are not the scam. These are regulated by the Government. Always deal only with Govt. authorised lenders. According to Ireland government regulations, no borrower will be asked to more than £24 as a fee for a salary loan. The default fee is capped at £15 in addition to interest amount. Ireland protects from paying more than twice of loan money. Every deal with the registered direct lending agency is reasonably priced and genuine.
Eligibility for Payday Loans:
There are no hard terms to become eligible for a payday loan; almost anyone in a regular job is a good borrower for payday loan provided:
- He/she is Ireland resident.
- He/she is 18 years’ old.
- He/she is in regular employment
- Gets wages paid directly into own bank account
- Not charged with bankruptcy
What Is the APR for a payday loan?
APR of payday loan differs at different lending agencies. It can be assumed to be more than 1000. The final fixing of APR depends upon the credibility, job’s nature, salary amount, required loan amount, and negotiation.
When will I receive my payday loan money?
Usually, all the Ireland registered reputed direct lenders transfer the approved loan money into your account within one day.
What to do if you can’t pay back payday loans?
If you ever feel problem in repaying back the payday loan, you must contact the lender in advance to readjust the terms and conditions. The most of lenders get ready the change the repayment period or other terms and conditions, but the required short-term relief comes at a cost.
Are there alternatives to payday loans?
Yes, there are many alternatives to payday loans, but the selection depends upon the required amount, convenient repayment period, credit score, professional status, income regularity etc. The possible alternatives to a payday loan that you can consider are –
Using a credit card
– Some credit cards allow for cash withdrawal and to use the money for a short period without paying any interest. It is a no-cost anytime financial help but for a limited period.
– If you have a satisfactory credit score, you can apply to a bank for an overdraft facility. The required funds are made available for the short-term at a very low interest rate. The repayment can be created automatically through a salary account.
Borrowing from the credit union
– The credit unions help the members by providing required cash help; it needs almost no documentation or involvement of any broker. The funds are made available shortly but not as fast as the payday loan. However, the cost-benefit makes it an excellent alternative to a payday loan.
Short-term installment loan
– It is the best-used alternative to a payday loan, but the long-term responsibility for repayment raises the chances of failure. It is a good choice if you need a relatively significant amount that is not possible to borrow with a payday loan.
A payday loan is the most availed facility with a wide range of options to choose the sources- direct and indirect both. The high cost is the only barrier; it can be managed by the proper planning, disciplined expenditure and on-time repayment.