Regular employment is a prerequisite that most payday loan companies expect from applicants. If you aren't able to demonstrate a regular source of income from a reliable source, then most would rightly question your ability to repay the total sum within the restricted timeframe of a short term loan. This is simply responsible lending and is a part of most policies.
The only exception to this particular rule would come if the applicant was able to provide a reliable guarantor who would take on the debt in the event of a default. In all other situations, the salary will act as a form of guarantee, enabling the lender to weigh up their income against the money being sought.
After all, it would be hugely risky to lend £500 to somebody who only took home £400. In fact, given the circumstances and the likely costs of borrowing, even a monthly wage of £600 might not be enough to guarantee that the applicant could repay the debt as agreed. As such, in the case of initial applications, customers will often be limited to around £400 and will need a salary in excess of £750 to secure the required funds; however, these figures will vary from lender to lender.
Without a job, the borrower will be unable to demonstrate that they can be relied on to return the funds. This is the fundamental issue that underlines all short-term borrowing. Whilst lenders may not employ the strictest rules on applications, there are still limitations on what they will offer and to whom. As such, they may loosen restrictions on performing credit checks and other traditional forms of financial enquiries.
So whilst opportunities may exist in rare instances, you will almost always need some form of financial guarantee to support any application. This is true in any form of borrowing or credit and so is certainly not unique to payday loans. The only major difference between larger personal loans and short-term alternatives is that there is less of an emphasis placed on your history.
For instance, if you were to go to a bank or other financial institution and request credit, they would almost certainly take basic factors such as your credit rating, salary and living arrangements into consideration. However, this will often incorporate historical information, including how long you've lived at your current address and worked for your employer. These kinds of details are largely superfluous for payday loan companies.
After all, why does it matter if you've had a job for 3 months or 3 years when the loan needs to be repaid within a few weeks anyway? All that really matters is that you have the money available on the agreed date, beyond that, it's not a major concern for them. This really opens the door for more people to get the money that they need without having to worry about a troubled financial history.
So if you have a less than perfect credit score, have moved homes a few times in recent years and have maybe changed jobs recently, this shouldn't have a major impact on whether you are accepted or denied. This is great for anybody who has come through a difficult period and has found credit difficult to come by as a result.
However, with 99% of payday loans, the one thing that you will need is a stable job with a monthly salary that meets the minimum guidelines. Many will consider those who receive their wages on a weekly basis, but it can prove difficult for those who are self-employed, and even more challenging for anybody reliant on benefits or who is currently out of work.
Vincent Rogers is a freelance writer who writes for a number of finance businesses. For Payday Loans, he recommends Payday Power.
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