Payday Loan explained...

Payday Plus has recently announced that it has now changed its lending rules to make its loans more accessible. Until now, self employed and those who are in temporary employment were not able to benefit from a payday loan with the company. This is because consumers who are self employed or in temporary employment are considered to be more of a risk to lend money to. There are no guarantees that the debt will be paid off at the end of the month. Therefore many lenders do tend to turn down those who work for themselves.

Now that Payday Plus has altered its rules, it is seen to be quite a big step within the industry. There are already some payday loan lenders who give loans to those who are working part time. However, in general these types of loans are only given to those who are in full time employment.

Julian, the Creative Director of Payday Plus, states:

“This is a great breakthrough for the payday loans market and for us personally, as a company. We are really excited to be able to offer our customers that little bit of added flexibility; something we pride ourselves on as a brand.”

The company has managed to extend its services thanks to negotiations with its lenders. When speaking of the negotiations, Julian continues to say:

“We have spent a lot of time negotiating with various lenders already in our automated application process and are now in a position to offer payday loans to even more customers. This factor gives us a clear advantage over our competitors and opens the door for a wider range of people to access quick, short term cash.”

Payday Plus offers consumers from £80-£1,000. There are some lenders who offer from £50-£2,000. However, due to the fact that payday loans are short term agreements, the amount of money that can be borrowed is limited. Most companies have a requirement that you need to be at least 18 years of age, in full time employment and you must have a bank account. Payday Plus is now one of the only lenders who offer self employment payday loans.

Why Self Employed People Struggle with Payday Loans

Self employed people mainly struggle to find payday loans because they do not have a set income. The amount that is earned from one month to the next can be completely different. Therefore the payday loan companies which do offer self employed payday loans often require bank statements dating back for at least a year to show what your typical level of income is. This will show whether you can afford to pay the money back.

Another thing that you might find with self employed payday loans is that the interest rates are higher. Again this is because you are considered to be a higher risk borrower and it is therefore reflected in the interest charged.

Overall this new change in lending rules which Payday Plus has introduced is a huge step in the payday loan industry. Time will tell whether more companies will follow suit.