23 Oct What Checks Are There For Payday Loans?
If you decide to take out a payday loan, then it is important to keep in mind there will be a variety of checks carried out in order to determine eligibility. After you have completed an application form with Badger Loans, we conduct hundreds of small checks so that we can provide an instantaneous decision as to whether we can approve you for a loan or not, as well as provide a quick quote. Depending on the result of the checks, it may be possible to receive your funds in an hour or less.
Initial criteria for payday loans
The majority of payday loans companies will have initial eligibility criteria for a loan this includes:
- 18 years of over
- Full-time UK resident
- Employed (part-time or full-time)
- Regular, stable income
- Valid UK bank account
- Valid UK mobile
- UK email address
- No guarantor required
If you are struggling to get a loan as you have a bad credit rating, don’t worry just yet: payday lenders may still consider your application, including loans with CCJs, IVAs, and bankruptcy.
Badger Loans will carry out a credit check prior to approving and funding your payday loan application. We do this using one of the three main credit reference agencies in the UK, these are Experian, Equifax and Callcredit.
As we receive these details in real-time, the lender gains an understanding of your loan repayment history, as well as with other your ability to pay back other types of credit in the past. A credit check also allows us to see if you have made any recent loan applications or have any outstanding debts.
Applying with Badger Loans does not impact your credit score. Nevertheless, if you have concerns about having a credit check against your name, you could apply for a no credit check loan: for example, car loans, guarantor loans and others only require collateral as opposed to assessing your credit score.
Looking to improve your credit score? Easy ways to make it better include closing down any credit cards and store cards that you no longer use, being on the electoral roll, as well as avoiding making too many loan applications at once. Read our full guide here on how to improve your credit score.
Affordability checks verify that the amount you have requested to borrow is something you can afford to pay back.
To confirm affordability, Badger Loans will ask for your monthly income and expenses in your application and this will allow us to figure out how much you can borrow without falling into financial hardship.
It could be necessary to provide additional information, such as payslips or bank statements to confirm your affordability. In addition, you may find that during the underwriting process, they may adjust the loan amount in order to meet affordability requirements.
Are you a repeat customer?
A lender may use historical data when determining your future eligibility if you have already been a customer with the lender in question. For example, if you repaid the loan on time, this is likely to work in your favour when it comes to further loans. However, this is on the basis that your affordability has improved and that you are not in further debt or in a worse financial position.
Other outstanding loans
Having too many loans, especially outstanding ones, in a short space of time may be alarming for some lenders, and could prevent you from being approved for a loan. If you are in a situation where you have several loans, credit cards or outstanding debt, it may be worth looking at a debt consolidation loan instead.