If there is one thing that can be said of the British financial market, it is that consumers have a very wide array of choices. When it comes to loans, this statement is even truer. There is a myriad of loan types available to consumers and it is up to them to choose which one would suit their needs best. One type of loan available in the market today is the payday loan and it is fast gaining popularity as more and more Britons are discovering its advantages over other types of loans, for certain circumstances.

What is a payday loan? A payday loan is a short term loan which is designed to meet the temporary needs of an individual. A payday loan normally involves relatively small sums of money as compared to other traditional loans.

Features of a payday loan - One of the biggest advantages of a payday loan are the speed of processing. From the time of application to the time of releasing, it may take as short as 24 hours. This period varies depending on the payday loan provider.

Another feature of a payday loan is that everything can be done electronically. This means no long waits in queues, no hassle of having to physically go to the bank, and the like. All you need is to go online from the comforts of your home or office and fill out the application form on the payday loan provider's web site. This normally takes a couple of minutes. You then merely have to wait for the approval. For first time borrowers, you would be asked to send in a couple of supporting documents, which bring us to another feature of payday loans.

The requirements for a payday loan are very few. All you would really need is a document proving that you have a stable source of income or a job. This could be your latest pay stub. You would also need an active bank account. You just need to fax copies of these documents to the payday loan provider and then wait for their approval of your loan.

How much can you borrow? It depends on the payday loan provider but you can borrow anywhere from £100 to £1,500. Usually, first time borrowers are limited to lower amounts while returning borrowers are allowed the higher limits. Furthermore, returning borrowers are not asked to submit the supporting documents anymore.

When do you have to pay the loan back? Again, this depends on several factors. The average period, however, is 2 weeks to a month. The idea is that you use your next pay to pay off the loan. With that in mind, it would be prudent to take into account exactly how much you can afford to pay off when your next pay check arrives.

As with other kinds of loans, you would be charged fees for late or missed payments. These can add up to a considerable amount if you do not manage your payment properly. Be a smart borrower and remember to pay back your loan on time.