payday loan definition and dates relevant to mortgage application

welly_59

Ive been researching mortgages after a payday loan and looking for some advice. 

I took a loan with dotdotloans, over 9 months, and didnt think this was what a lender would call a "payday" loan. Then went off and did some research on lending criteria etc, and can only find one lender who specifically states what a payday loan is from their point of view - anything with less than 12 month term and interest over xyz%. First question i guess, would all lenders consider dotdotloans a payday loan as it was less than 12 months in term?

Second question, when lender state no pay day loans in 12 months, do they mean from started within 12 months, or agreement finished within last 12 months?

ACG

The answer is "it depends". Every lender differs. 
Most normal lenders class a pay day loan as a pay day loan - ie a 1-2 month loan with a silly interest rate. Some of the more specialist lenders class a pay day loan as anything with an interest rate over say 100%. 

The same goes for the time frame, some work from the date it was taken out and others from the date it was satisfied. 

When I am researching a case, I always draw a table with potential issues across the top and the lenders down the left hand side. Once I get a row of ticks, we are (hopefully) ready to go. If you are doing this yourself, that might be one of the things you add to the table. 

However a PDL in itself is not a deal breaker and does not usually mean higher rates. But in an ideal world you want a month or 2 between application and the latest loan being cleared just to show its now cycle you are in.