Payday loan requirements

Payday loan requirements

More and more often, consumers depend on the support of financial companies and banks. This is the case, for example, when private purchases, a planned start-up or mandatory repairs can not be done with own funds, but a payday loan is required.

Apply for a payday loan: Requirements

Interested customers have two options for this, because payday loans can be requested both over the Internet and directly to the desired bank. However, the prospective borrower should know that there are some conditions for lending at all. Furthermore, the financial company requires numerous documents, which should be compiled by the customer in advance.

Conditions of Borrowing

Not only the financial company makes certain demands for lending, but already the state. For example, a borrower must have completed at least 18 years of age so that he is fully capable of acting. If younger consumers are already in need of a payday loan then at least one parent or guardian must have their consent.

There is no legal limit on age, but it is clear that many financial companies are having a hard time lending to older consumers, especially retirees. In addition to the regular and sufficient income of course, the life expectancy of the consumer plays a crucial role, since the bank can not be sure that a complete repayment of the payday loan will take place. Nevertheless, retirees can apply for a payday loan, but it may happen that only smaller payday loan amounts are possible, an additional guarantor is required or the monthly repayment installments are higher, in order to ensure the fastest possible repayment.

Another requirement for successful lending is the financial status of the prospective borrower. Here, the financial companies pay special attention to the monthly income, which must be above the legal attachment limit. It goes without saying that value is also attached to the corresponding credit rating, which is why banks and savings banks seek information from each other before granting any payday loan. This shows whether the consumer already has existing debt and, if so, repays it regularly and responsibly. If this is not the case, then a negative entry will immediately prevent a payday loan from being taken out.

It may also happen that a financial company demands collateral from the prospective borrower. These can be both existing assets and a guarantee. A guarantor, however, is that the guarantor fulfills the same conditions as the financial company demands from the actual borrower. Thus, credit rating and a regular income of the guarantor are a prerequisite.

Required documents for a payday loan application

First, the consumer must complete a corresponding payday loan application. This application requires personal information from the borrower, such as the full name, address, contact details, date of birth, marital status, number of children and, of course, all employment information. However, the financial situation is also inquired which means that the applicant must provide information on income, monthly expenses and existing payday loans and other obligations.

For employees, the compilation of documents is very easy, because usually they only need the proofs of income of the past three months in copy and possibly the corresponding bank statements showing the actual salary receipt. Some financial firms are also demanding last December’s December statement as it shows the total income of a year.

Proof of self-employed and self- employed persons is a little more difficult, since income tax receipts, VAT returns and account statements can only be used to estimate future revenues and revenues.

Our conclusion

Future borrowers must be of legal age, have a proven income and a sufficient credit rating. All information given by the consumer to the financial company must be documented in writing.

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