This depends on the payday loan company that you apply to. Some payday loans are paid within days, but now with increased competition, this has been shortened to hours, while some companies claim they can give you a pay-out within minutes of you applying, depending on the time it takes for your Bank to process the money transfer.
What you should know
Payday loans are a short-term loan for salaried people that need money until their next payday arrives, at which point they must repay it in full, along with any interest and charges.
Recently this has now changed, and people are able to borrow for up to three months or longer and expected to repay back the loan in monthly instalments. One of the drawbacks with these high cost, short-term loans, is that your financial situation could be a lot worse if you are unable to afford the repayments on time.
To protect borrowers from unscrupulous lenders, the Financial Conduct Authority (FCA) imposed a cap on the interest and default fees a lender can charge, so that means that borrowers will never pay back more in fees and interest than 100% of what they initially borrowed. For example, taking out a payday loan for 30 days will require you to pay no more than £24 in fees and charges per £100 borrowed. While the default fee capped at £15 plus interest on the amount borrowed, can stop the debt from spiralling out of control.
If you are considering taking out this type of loan you need to think very carefully before committing yourself. Are you expecting your finances to increase in the next month, or are you willing to cut back on expenditure until you have finished paying it off?
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