Quick, instant and other forms of fast finance are a commodity a lot of people seek for various reasons.
When you need money to cover a bill, waiting for a traditional bank loan will sometimes come too late.
Traditional loans will usually be larger (with a high minimum loan value). You may not need a large loan, for one or two Direct Debits.
Lenders and brokers alike advertise quick payday loans. How quickly could the money be in your account when you apply?
The payday loan lending process
If you are looking for a fast payday loan solution, then you can find them online through direct lenders or brokers.
The process is similar, whether you apply directly with a lender or compare payday loans before borrowing.
Payday loan application form
You will start by filling in a loan application form.
The form will ask for personal details, such as your name, address, and date of birth. It will also ask for financial details, including income and expenditure figures.
You will usually be asked to provide information about a bank account that your loan can be paid into.
Most lenders need their customers to be in employment. You may be asked for details of your job.
These application forms are in-depth because they are used for affordability assessments. They need to gather the details that will be used to approve your loan.
At this point, you may be able to speed up the application process by using a payday loan broker. You will only need to provide your details for one form, which will be sent to a selection of lenders.
Initial checks by lenders
Once you have provided your details, the lender will run checks and assessments.
This stage may end quickly, with an approval in principle, or could end with your application not being approved.
Sometimes, lenders will need more information or evidence. This is the part that slows the process down, which is why lenders cannot promise instant payday loans.
Lenders may need you to provide further details of your income. This includes expenditure or employment, before offering to provide a short term loan.
Payday loan approval and payment
Once the lender has everything that they need, they can make a final decision.
Some lenders will do this immediately, once your form has been received. This is likely to be the case if your application is straight forward, and nothing looks out of the ordinary.
In other cases, you may need to send more documents.
The lender can then transfer money to your account.
Sometimes, lenders transfer the funds immediately. Others send payments in bulk, once every couple of hours.
In some cases, lenders have specific payment times once a day. If you have missed this, you may be waiting until the next day for your money.
Leading lender Wonga will send money within 5 minutes of an application being approved.
QuickQuid advertises that loans usually reach bank accounts within 10 minutes of approval.
Sunny loans can be in your account within 15 minutes of loan approval. Peachy loans use the same timeframe.
Some lenders will transfer funds at any time of the day or night. This means that you can receive the money that you need, even in the early hours of the morning.
Other lenders will only transfer money during office hours. Peachy is one of these lenders. They say that applications approved outside of these hours will be processed the following morning.
Your bank’s impact
Once the lender has processed your loan and sent the money, the rest is in the hands of your bank.
Most banks support faster payments. In this case, you will likely receive the money straight away. To cover delays, banks (and lenders) state that the funds should reach you within 2 hours.
If your bank account does not support faster payments, you could be waiting up to 3 days for the loan. Usually, you will receive your money within 24 hours even without faster payments.
The speed of quick payday loans
The speed of payday loans can vary considerably. Several factors affect how quickly you can receive the money.
Some lenders claim to offer instant payday loans. This is not possible, and an authorised and regulated lender should never be making this claim.
Same day loans are more realistic, but not always possible.
Many loans are processed and paid within a few hours. This will happen if your financial situation is straightforward and your details match with the records checked by the lender.
If a loan can be approved almost instantly, and your bank accepts faster payments, then you should not be waiting long for the money.
An hour or two, from the first application form to money in your account, is as close to instant as payday loans can get. This is the experience for most borrowers.
In some cases, the process can take longer. It could also depend on whether you’re looking for a loan and have a poor credit history. You may be asked to provide identity documents, or evidence of income before the loan is offered.
Sometimes, the computer algorithm that makes lending decisions will flag a case up as too complicated. A human will need to review the loan request. The wait for this can slow everything down.
Once your loan has been approved, automatically or manually, you will need to wait for the money to be sent.
If you need money immediately, check with the lender before you go through with the application. They should list their payment times. Make sure that you are happy with how long you may have to wait.
If a lender only makes payments until 5.30pm, and you need money to be in your account by the next morning, then you may be better finding a different loan.
Ways to reduce your wait for a payday loan
If you need to find quick payday loans in an emergency, there are a few steps that you can take to try and fast-track your application:
Use a payday loan broker
A payday loan broker, with a comparison site, can save hours of your time.
You fill in one form, which is sent to various approved lenders.
You can also avoid searching the Financial Services Register, to check that lenders are approved and regulated.
Brokers, like lenders, must be authorised by the Financial Conduct Authority.
A registered broker will only work with registered lenders. Their reputation is on the line, and they can lose their FCA authorisation if they pass your details to an unauthorised company.
If you have verified that you are working with a genuine loan broker, you will not need to search for each individual lender that presents an offer to you.
Check loan payment times
Some quick payday loans are sent to bank accounts more quickly than others.
When applying, check the information that is provided by the lender.
You should pay attention to:
- How frequently payments are made.
- Whether loans are sent in bulk, or individually after each approval.
- Whether loans are processed only during office hours, or at all times of the day and night.
Provide accurate details when applying
Providing incorrect information can slow your application down.
If the details you provide do not match up with records, such as your credit file, then the lender must find out why. They may pause your application and ask for more evidence. In some cases, incorrect information will result in a loan not being approved.
You might not be doing this intentionally. It is important to double-check any information that you provide.
Make sure that your income and expenditure figures are accurate. Also, check how long you have lived at your current address. It is easy to get this wrong.
Before you begin your application, it may help to have your budget to hand.
Every lender will carry on a credit history check before agreeing to lend you any money. Use no credit check options to get to know your chances of being approved for a loan.
Quick payday loans: summary
Payday loans can be processed quickly, but are not an instant source of funds.
People in need of an emergency loan can enjoy the convenience of an online application. Yet, you should always check how long you should expect to wait for payment.
It is not safe to assume that you will have your loan approved immediately. If you see financial difficulty on the horizon, you should act as quickly as possible.
Do not leave your application until the last minute. There are many factors that could slow the process down, even with quick loans.
Even after your loan has been approved, there may be a short wait. Money may not be sent instantly. Whilst many lenders provide transfers of cash within 10 minutes, there are some that will do hourly transfers. Also, others will not send funds outside of their office hours.
In some cases, banks do not accommodate faster payments. If your bank account does not, then you may be waiting more than 24 hours for the funds to be added to your balance.
Even with factors that may slow things down, most borrowers can apply for a payday loan and receive the money in a short space of time.
These are often much quicker sources of finance than traditional loans, credit cards and borrowing from family.