Payday loans are a means for borrowing between £100.00 and £500.00 typically and the application process in the vast majority of cases takes place online. This means that lenders will assess the suitability of the loan in the most part by electronic means. Generally speaking it is the attention of payday loans lenders to deliver a service which is flexible, discreet and timely, with most lenders being able to make a lending decision the same working day the application is submitted. It is important to realise that lenders will not place speed as the uppermost important factor and therefore will not progress an application simply based on this. Instead modern day payday loans lenders will focus their efforts on making sensible and affordable lending decisions for their customers. Let’s look at the process of applying for payday loans, in greater detail, to understand then exactly how this generally achieved.
Payday loans as mentioned above are accessible via the means of an online based application process. To apply for a loan a lender will offer an online based application form which can be completed usually in little longer than 10 minutes. Typically speaking the application form itself will be broken down into a number of clear and logical steps, designed to gather all the key information regarding the applicant to make an informed lending decision. These sections usually focus around personal information, employment details and banking information. By gathering this information it allows the lender to run a series of automated checks to assess whether the requested loan can be deemed as suitable. These automated checks are completed via the means of what is commonly known as a ‘decision engine’. A decision engine assesses the identity, address, banking information and credit worthiness of an applicant. It will seek to verify the personal information of the applicant and then assess the credit worthiness against the individual payday loans lenders individual criteria. If at this stage any of the lenders requirements are not met, there is a high probability that the application will be declined.
In most cases once the decision engine has completed its checks and in essence the application has been provisionally accepted by the lender. At this point the lender will likely manually review the application to ensure all the information contained is as they would require. At this stage there may be a requirement for the applicant to provide additional documentation to support the application. Additional documentation is usually requested when an automated check has highlighted a need to verify some of the information relating to either identity, address or even employment. In some cases there will not be a need to provide any form of documentation in order for the payday loans lender to make their decision. Providing the lender is satisfied all of their electronic and manual checks have been successfully passed, it is at this point that the lender will have the ability to approve the loan and transfer the funds, usually via faster payment, to the account nominated in the application.