What Amount Can I Borrow with a Payday Loan?

Payday Loans or same day loans, as they are sometimes known, are incredibly helpful for whenever someone finds they need a relatively small amount of money quickly.

As such Payday Loans are designed as a short term financial solution and are only really applicable when someone needs an emergency cash advance. This really could be for anything from bill payments to an emergency repair. As a result only a relatively small amount of money can be borrowed, especially if it is the first time you have applied.

For example, if you were looking to borrow from a payday loan company you could potentially borrow somewhere between £50 and £1500 – however this does vary between lenders. What's the reasoning behind this amount ?

Well, considering payday loans are so easy to get hold of, and they really are available to anyone who needs the cash (as long as they adhere to certain specifications), the lenders would be a tad reluctant to lend thousands or hundreds of thousands of pounds.

For bank loans, there are strict lending guidelines to adhere to, not only that, but the application process is a long one and can often take several days and several trips to your local financial institution. Due to this lengthy process and thorough checking, borrowers are able to seek larger sums of money in comparison to payday loans. However, not everyone can apply for bank loans, and you certainly don’t get the cash advance as quickly as with sameday loans.

Why would you need the money quickly? Let’s say that you’re faced with an emergency situation, such as significant damage to your vehicle or a smashed window at home. If you checked your bank account and couldn’t afford the payment to get these things sorted, you would need to seek financial help.

A bank loan would take several days and you don’t have time to wait. What’s more is that you don’t need a huge bank loan, all you need is a small amount to get you through this scenario and then you want to pay the money back on your next payday – with bank loans this isn’t possible, with payday loans this is possible.

So literally anyone can apply for a payday loan then? Yes, because you're borrowing a relatively small amount for a short period then these lenders can lend to anyone as long as they meet the lender's recommendations. Before applying, it’s recommended to check the payday loan company’s lending guidelines. Normally they make sure you’re over the age of 18, that you have a valid bank account (with a debit card) and that you’re in employment earning over £500 per month.

Just because the amount you borrow is relatively small, the lender still calculates and judges the amount they can lend you. So the amount you apply for might not be the amount that you get. This is especially true if you earn the minimum amount required, and if it’s your first application.

The lenders want to make sure that first of all that you can actually pay the money back on your next payday – hence the name payday loans. Therefore, when the lenders calculates the amount you can borrow, it is unlikely that this will be more than your monthly salary. Secondly, if it is your first application, you may not obtain the amount you have applied for. This is because payday loan lenders need to safeguard themselves from irresponsible lending for their sake and the sake of their customers.

So there you have it, when it comes to payday loans you can borrow anything up to £1500 depending on the lender. However, the true value of this loan comes in its simplicity and speediness – to help you out when you need it most.