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- Bad Credit
Having a bad credit should not prevent you from getting access to extra funds when you need them. However, it is also a fact that most lenders will always look at your credit score when deciding whether to grant your loan request or not. It is a good thing that there are lenders that will allow bad credit borrowers to get access to quick cash through payday loans.
Payday loans for bad credit in the UK
There are several lenders in the UK that would be willing to lend you money even when your credit standing is a bit shaky. However, it is also a fact that you are considered a risky borrower by the lenders because of your spotty credit history. This is why you can expect that the loan is going to be slapped with very expensive fees and interest rates. Provided that you can afford to pay it back on time though, this should not have any negative impact on your finances in the long run.
Benefits of payday loans
There are numerous benefits that borrowers can get out of taking out a payday loan, even despite the fact that they're known for their very high interest rates. For instance, it is considered as one of the easiest and fastest ways for borrowers to get their hands on emergency cash. There is no telling when an emergency expense might crop up and it is reassuring to know that you can go this route if your need is dire.
They are easily available no matter the time of day or the day of the week. Many providers offer a 24/7 option especially those that allow borrowers to apply online. Processing is very fast as well and once approved, the money can be at the borrower’s account within the day or even just a few hours. Qualifying is easy too. Even when your credit is bad provided you meet the basic requirements, these lenders are still going to consider you for the loan. As long as you can prove that you can pay the amount back, you’ll most likely get approved.
Getting the best payday loan
To find the best payday loan offers, you’ll need to shop around and find out how much you’ll get charged for the amount you’re borrowing. Consider other fees and charges and compare these with what other lenders offer to choose the best.
If you are pinched for cash and your next payday is still a few days away, it might be best to consider taking out a short-term loan. Specifically, you can take out a payday loan. As the term infers, this is a type of borrowing where a small amount is usually involved, meant to cover your expenses until your payday.
As a short-term loan, lenders expect you to pay the loan amount and the interest rates on your next payday. Unlike other loans where you can make several repayments over a certain period, payday loans require you to make a lump sum payment on your due date.
In the modern financial world, payday loans are very much like cash advances. Employers in the past used to practice offering cash advances to employees in the event of financial emergencies which they then pay back on their payday. If you want to take out a payday loan, it is important to know all the aspects of this type of borrowing to know what you’re in for.
Compared to standard loans, payday loans are so much easier to take out. Most lenders do not do credit checks so it is even accessible to those borrowers with not so attractive credit records. In addition, the requirements are easier as well. Banks tend to have rather stringent borrowing requirements which make them less accessible to many borrowers.
The speed in which these loans are processed and then approved make them even more ideal for cash emergencies. Some lenders, especially the ones operating online, can get applications processed and then funded on the very same day. There are even those that will only take a few hours to get the funds sent to the borrowers.
Small borrowing amounts
There will be limitations to how much you’ll be allowed to borrow when taking out a payday loan. Oftentimes, the borrowing amount is capped at £1,000. While this is not an issue to most borrowers, this may not be ideal if your emergency financial need is more than £1,000.
It does not improve your credit rating
Borrowing money and then paying it back on time is one way of improving your credit score. However, while payday loans will not have a negative effect on your score, it will not have a positive one either. Also, the interest rates charged are extremely high.