A person is usually not allowed to take another payday loan unless they have repaid the previous payday loan. The possibility to get a new payday loan is quite narrow and will depend on the profile of the borrower and the guidelines of the lender. In most cases, the borrower has to wait for at least 3 working days to apply for a new payday loan after repaying the previous loan.
Borrowers can also approach different lenders to get a new payday loan when they have an existing loan that is not yet repaid. The lenders will review the profile of the borrower and the decision to sanction is solely at the discretion of the lender.
Additional Reading: How Do Payday Loans Work
Points to Keep in Mind, before Applying for Payday Loans
Payday loans are one of the easiest forms of loans that are available to individuals. These are short term loans and the loan amount depends on the salary of the borrower. Payday loans can be applied to meet the cash crunch in case of any emergency. However, the rate of interest on these loans is quite high, often in the range of 300% to 400%. This high-interest rate is often camouflaged to misguide the borrowers.
Any default in repayment of these loans leads to a direct impact on the credit score of the borrower which will be reflected on their credit report for a maximum period of 7 years.
Payday loans are short term loans of flexible tenure. These loans may seem attractive but are quite expensive as compared to personal loans or even interest on credit cards.
Additional Reading: What Are The Pros And Cons Of Payday Loans