Payday Loans in Glasgow
As is the case with many other cities in the UK, it is not uncommon for Glasgow residents to face financial difficulties. The west-central Scotland city currently has an unemployment rate of 4.3%.
Additional studies show that 31% of the UK population reported one or more signs of financial difficulty. In 2012, about two million residents took out high-cost loans due to the lack of credit. Also, over 5.4 million high-cost, short-term loans were taken out in 2019. 37% of payday loan borrowers and 29% of short-term instalment debtors were between the ages of 25 and 34.
Short-term loans such as payday loans can help Glasgow residents who are struggling financially and need a little extra cash to get through the month.
What is a Payday Loan?
Payday loans are short-term, cash advances that can provide financial padding during difficult times. Consumers can use these loans to pay for unexpected expenses, overdue bills, and other extenuating monetary circumstances.
As is implied by the name, quick payday loans are intended to be paid back with a borrower’s future salary. This means that loan repayment is typically set to the time of the debtor's next pay cheque, at which time interest must be repaid. Unlike personal loans that can be paid back in increments over a set duration of time, payday loans are required to be repaid in one mass sum. Payday loans are meant for short-term use and not long-term debt obligations.
How to Apply for a Payday Loan
Make sure the minimum requirements are met.
Know your limits.
Work with a trusted lender.
Payday loans in Glasgow operate like other short-term loans in the UK. Borrowers must:
Once an application is made, it is then up to the lender to determine if an applicant is approved or not. If a candidate is approved for a loan, he or she will typically have to sign a loan agreement set forth by the lender. Residents are usually able to access their loan funds within a few business days. This will ultimately depend on the lender and the borrower’s unique circumstances.
As mentioned above, the FCA has regulations in place that restrict the number of lenders that operate in Glasgow and to protect borrowers from malpractice. For example, interest fees cannot be greater than the capped percentage of 0.8% per day of the loan amount that is borrowed, and default charges cannot be greater than £15.
Does Credit Score Matter?
For almost all traditional loans, lenders will examine a potential borrower’s credit report and credit score. Credit scores are used to determine an individual’s credit risk, assess an applicant’s capability to repay a loan, and sometimes determine the interest rate that will be charged.
Although payday lenders may have more relaxed rules in comparison to conventional lenders, they too want to ensure that their borrowers are able to afford the necessary payments. Some lenders will offer guaranteed payday loans for bad credit or bad credit payday loans, but such assertions are false. Short-term loan lenders do not offer no-credit-check payday loans, and as is typical with other loans, an applicant’s credit history will play a role in determining if a loan will be granted or not.
But payday lenders take more than just credit histories and scores into consideration. Most lenders will also take an individual's income into consideration when determining their eligibility for a loan.
UK borrowers may be drawn to high-cost, small-euro loans due to flexible application processes and fast loan approval. It is important that residents remember though, that they are usually expected to repay their loans in full when it is due. Borrowers should be able to repay their loan amounts in order to avoid getting into potentially worse and more precarious financial situations than before.