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Yes, it is possible for you to take out a payday loan on behalf of another person, such as a parent or sibling. It is very important to note however that the application will be in your own name, including the background details and any credit checks. This works by approving the loan in your name and depositing the funds in your own checking account before you are able to transfer the money to your relative. 

There is a risk involved in this arrangement as ultimately it will be you as the applicant who is liable for the loan repayment terms. There may be a number of reasons why a relative asks you to apply on their behalf, but you should always encourage them to apply themselves before taking on this responsibility. 

If your relative is not able to fully pay you back, the repayments to the lender will fall to you.


Is It Legal To Get a Payday Loan For a Parent or Sibling?


Yes, it is legal to get a payday loan for a parent or sibling however the application must be made in your own name. You will not be able to apply using their personal details and it will be you as the applicant who is liable for the repayment terms of the loan. 

In certain circumstances you are able to apply for a payday loan for a relative, for example if your parent or sibling has a mental or physical disability and is unable to apply for the loan themselves. 

In these instances, it is important that your relative fully understands the terms of the loan and has the means to repay the loan. Falling behind on loan repayments can have serious implications for their credit rating and their ability to take out future loans. 

payday loan on behalf of a relative

Why Would A Relative Require Me To Apply For A Payday Loan On Their Behalf?


There are a number of reasons a parent or sibling might ask you to apply for a payday loan for them, including bad credit history, having too many open loans or if they are out of employment. 

Your relative may have had some unexpected expenses that will leave them short until the end of the month. They may personally have a bad credit history which can sometimes be a barrier to receiving loan approval, and by applying on their behalf with a good credit rating it could be advantageous for a lower interest rate on the loan. 

In some US states there are laws on how many loans you can have open at one time, therefore your relative may require you to take a payday loan out while they continue to pay off their current open loan. Note it is not advised to take out a payday loan to pay off an existing loan. 

Being a US citizen is also a criteria for payday loan approval, you will need to provide this information when applying for a payday loan. If your parent or sibling is not yet a US resident they will not be eligible to apply with a lender, therefore may ask you to apply and have the loan in your name.  


Is There a Risk Involved In Applying For a Payday Loan For a Relative?


Payday loans are generally considered a risky form of finance due to their high interest rates and repayment terms. If you apply on behalf of a relative you are taking on this risk and failing to meet the repayment requirements can damage your credit score. In some cases your employer could be contacted or have your assets seized. 

You should also consult a financial advisor to check the legalities of applying on behalf of your relative. Make sure there is no risk of identity theft or fraud which could have serious consequences and see if they suggest alternatives to resolving your relative’s financial difficulty. 


Are There Ways To Assist A Relative Who Needs Help With Their Payday Loan?


If your relative currently has a payday loan there are several ways to help them meet their repayments:

Creating A Budget

Taking the time to look at their incomings and outgoings can be extremely beneficial to getting your relative’s finances back on track. By examining their finances fully it is easier to spot ways to cut unnecessary spending and make some savings. 

Contacting Their Lender

If your relative is aware they will struggle to meet repayments on their payday loan it is essential to contact their lender immediately. Together they might be able to explore other repayments options and prevent your relative from falling into further financial difficulty. 

Looking For Long Term Help

You could explore other options for financial help including a longer term personal loan from a traditional lender where the interest rates are not as high as payday loans. This could therefore be a more affordable option for the long term.