One of the most frequently asked questions regarding payday loans is, how much can you borrow with a payday loan? Well, it’s not a particularly easy question to answer in light of the fact that every lender is different. Whilst Company A might be able to provide a first time applicant £1,000, Company B might only be able to offer half that. So in short, there isn’t a universal answer; however, we’ll take a look at a few of the options available and how it is all calculated.
Most payday companies will advertise a minimum and maximum that they are prepared to lend you – even before you start the application process. They usually have a fancy little tool which lets you drag to the amount you want to borrow, and the time you want to borrow until. At this stage, the lender’s website will show you how much you are going to repay on your payday, taking into account the interest charges and fees.
The amounts the payday companies will lend you will vary but is generally between £50 and £1,500, even as little as £1 in some cases – although it would be rare that anybody would apply for such a limited sum. Remembering that payday loans should only be used to relieve short term financial difficulties, the amount that you request should be dependent upon your needs. This should be for situations such as, payment of a utility bill or emergency house or car repair, where payment does not exceed £1,500.
Payday loan companies also have their own stipulations. Not all lenders will let you borrow up to £1,500, especially if it is your first time requesting a loan. Again, payday loan companies will vary in the amount they lend to first time borrowers. Generally, first time customers can be approved for a loan up to £300. As customers build up their trust rating with the lender, they should be able to apply for greater amounts, but this may take time.
Another stipulation that payday loan companies often use to determine how much money you can borrow is how much you earn. The higher your salary, usually the higher the amount that the payday loan company will lend you. If you are a trustworthy and a returning customer you could be approved for much more. However, if you only receive a monthly salary of £600, it would improper of a lender to offer a loan of £700 as you simply couldn’t afford the repayments.
If you find that you struggle to pay back the amount that you have borrowed then payday loan companies can be flexible in this regard. Lenders do understand that from time to time you may encounter other issues which mean you can’t pay on time; why else would you have applied for the loan in the first place? However it is really not advisable to ask for either roll over payments, or seek another payday loan, as you will incur many more fees and interest charges.
If you find yourself in a vicious cycle where you cannot pay back your initial loan, then call the lender directly and explain your situation. Do not delay repaying the loan as the amount you pay back will rise significantly. Instead of borrowing from multiple payday providers, if you seek to borrow more money to pay back your initial loan then speak to your bank; they may be able to offer you an overdraft facility or lend you a larger amount with a smaller interest rate.
Payday loans are an excellent short term solution to any of those financial difficulties that more and more of us are getting into, especially in the current climate. The answer to the initial question is straightforward; if you are a first time borrower, then you may only be allowed to borrow up to £300, depending on the lender and how much you earn. As you pay back the loans, your lender will trust you more and lend you more.