A debit card loan allows you to borrow money using your debit card to receive the funds and make monthly repayments. The lenders we work with at Payday Loans Hub require you to have an active debit card to be eligible for a loan, as this is a secure way to send money to your bank account that you can use to pay for emergency purposes and other expenses.
Using a debit card means that you can borrow £50 to £2,500, receive funds within 1 hour if you are successful, and then repayments can smoothly be taken from your account every month. Our online application takes just 5 minutes to complete and there are no upfront fees for applying. To apply for a debit card loan, simply click on the apply now button below.
What are debit card loans used for?
Debit card loans are typically used for emergency expenses and tide people over until the end of the month. This includes things like car repairs, rent, broken boilers, council tax and other household emergencies.
When bills are pressing or you have faced a difficult month, the opportunity to receive money upfront in one lump sum allows you to pay for your expenses and give you some much needed breathing space.
We work with over 30 lenders who each have flexible options, allowing you to repay over 3,6 or 12 months. You also have the option to repay your loan early at any point, if you have the means to do so – and this will typically be cheaper since you are accruing less daily interest over time.
What is the criteria?
- Must be over 18 years of age
- UK Resident
- Employed (part-time or full-time)
- Earning a minimum of £500 per month
- Able to make repayments
- Active debit account
- Active email account and UK mobile number
How do repayments work for debit card loans?
Our lenders will typically arrange payments in equal monthly instalments. So whether your loan lasts 3 or 6 months, you know exactly how much you are paying each month. Your loan is made up of interest and capital, so you start by paying off all the capital on the loan and then the interest repayments.
The main benefit of using debit card loans is the smooth repayment process. Online lenders use something called continuous payment authority which is very similar to a direct debit. Your debit card is tokenised upon approval and every month, the repayments are taken out of your debit account by the lender on a repayment date that you have chosen.
Most people will choose the last Friday or working day of the month, because this is when they will most likely have received payment from work and have some money available in their account to be collected.
Using continuous payment authority is convenient for both lenders and borrowers, since it means that everything is process automatically on each pay date and there is no need to go to the bank, make a phone call or pay in a cheque – it is all handled smoothly online. If you want to make a manual payment by cash or cheque, some of our lenders will accept this but you must give them notice. Any late repayments may incur late fees or charges.
Can I use a credit card for a loan?
No, the lenders we work with at Payday Loans Hub will not allow you to use a credit card to receive funds or repay your loan. Firstly, a credit card cannot be used to receive funds, this is where you need a current account or debit card. Secondly, most short term and payday lenders so not like to give customers the option to repay a loan using a credit card, because it is like using one form of credit to repay another – and this can eventually lead to debts piling up and causing a debt spiral. There have been cases where payday lenders have accepted credit cards as repayment, but this is not authorised by the Financial Conduct Authority.
Of course, you can use a credit card as a type of loan. After all, your credit limit is the amount you can borrow each month, whether it is £200 or £2,000 and you have 30 days to pay it off, like a typical loan.
Can I receive cash in hand?
The lenders we have partnered with are specialist online lenders and will always transfer funds to your debit account. There are lenders with storefronts that can provide cheques or cash in hand – however, you will usually need to go to their store on the high street in order to receive it. The process and simplicity of debit card loans means that everything is handled electronically and securely from starting the application, receiving the funds and making repayment – simple.
What happens if you miss a repayment?
If you miss a monthly repayment, you will typically be notified by the lender that the payment has not gone through as planned. This could be in the form of an email, SMS, phone call and eventually a letter. The most common reasons for payments not going through is having no money in your account or a change of card details – so usually these can be fixed quickly and payment can go through without any extra charges.
If however, you find that you are not in a position to repay your loan and several days have passed without making a payment, you may incur late fees from the client. This includes a one-off default fee each month of £15 (this is a price capped by the FCA) and daily interest will continue to be added each month (which is capped at 0.8% per day). With this process, it is common for a loan that originally cost £300 to end up being £330, £350 or £400.
The best thing you can do is speak to your lender if you are having problems repaying. Each lender we work with is committed to responsible lending practices so they are trained to give you forbearance and a bit of leniency. So this could mean delaying payment for an extra week whilst you get back on your feet, setting up an arrangement of payment plan or freezing any interest short term.