UK Payday loans range from £80 to £1000 and are taken out from the date of application to a customer's payday. Typical borrowers have an annual income between £15,000 and £35,000, but they live on a tight budget that leaves little room for financial miss-steps or emergencies. A payday loan helps people to get through a cash crunch without paying late fees or bouncing cheques – the charges for which can be considerably more expensive for the customer than payday loan fees.
The loan process is simple. Customers apply online, the application takes less than five minutes from start to finish, with instant loan approval being given to all customers who meet the qualifying criteria and the loan is deposited the same day for the customer to receive their funds within 48 working hours or less.
First time payday loans average £200 and are paid into the customer's account on the day of application (subject to bank clearing times) and repaid on the customer's payday.
Typical customers are not just sub-prime - they are also regular prime and near prime customers whose outgoings outweigh their incomings on 3-4 occasions per year.
Previously payday loan customers would have missed payments, incurred bank charges for going over their overdraft limit, bounced cheques, or incurred debit card misuse fees.
Payday lending is a multi-billion dollar industry in the US and one of the fastest growing UK consumer finance products.
Unexpected bills or expenses are most often the specific trigger event that causes consumers to take out a payday loan.
Offering a payday loan product to your existing client database would offer a good opportunity to re-open the dialogue with the client with a new and interesting product.