Are Payday Loans Just for Those with a Poor Credit Record?

There are lots of assumptions that people make about different types of loans. It is a good idea to make sure though, that these are right. This is because if you need a loan at any time, you will need to make sure that you pick the loan that suits you the best. As there are so many different types, it can be easy to pick the wrong one. Therefore, if you make sure that you know about the different loans and what they can provide for the lender, it will allow you to make the right choice when you need one. So, you may know a little about payday loans, such as the fat that they are for those with a poor credit record, but it could be worth knowing a bit more so you know more about who they are actually for.

Bad Credit Record

It is right that those people with a poor credit record are likely to be able to use a payday loan. Many people with a poor credit record will be turned down for a traditional loan. This is because a lender will feel that they cannot trust them to repay the loan on time because they have not been able to do so before or they have missed payments on other things. A payday lender will not worry about this, in fact these loans were set up for people who struggle to get a traditional loan, so that they are able to still get financial help if they need it. However, the loans are not exclusively for these people as the lenders will not check and will be happy to lend to anyone. Of course, if you do have other loan options, you will want to make sure that you compare them all to find the best one for you. There may be other features that payday loans can provide for you though, that other lenders will not be able to.

Need Money Fast

It could be the case that you need money really quickly. Sometimes we have an emergency and need to find money fast. With a payday loan, you will be able to get money quickly, sometimes within a few hours. This is much quicker than many loans which could take a lot longer to arrange. Lenders will vary though and if you do need money extremely quickly, then it is worth checking with lenders before you apply to make sure that they can get you the money when you need it. Although this will take time, it will be worth it because otherwise you could end up applying for something and finding that it takes longer than you expected and it is too late when you get the money that you needed.

Quick to repay

A payday loan has to be repaid quickly. This can have advantages for those people that do not like the idea of being in debt for long because they will get it repaid quickly. The whole debt, which includes the money that you have borrowed and the fees and interest will all have to be repaid when you are next paid. This could be just a few weeks of even days form when you took out the loan. This means the loan will be very short term which people could really like. However, it does mean that you will have to come up with a lump sum of money quickly and so it is important to make sure that you check first to make sure that you will be able to repay it. The repayment ill come out on the da that you are paid, but you need to check that there will still be enough money even after you have paid for the other things that you need to pay for and it will leave enough to keep you going until the next pay day.

How do Payday Loans Work?

As payday loans are not offered by traditional banks, it is often the case that people do not know how they work. It is important tough, to have a good understanding of all types of loans because it will help you to be able to decide which loan will be best for you when you need to borrow money. There are lots of different loans and getting the right one is important because it means that we get better value for money from the loan if we get the one that suits us the best. Also, we might have requirements, such as needing a certain amount of money, that not all loans will be able to fulfil. Therefore, it is wise to find out how payday loans work.

How Much Can I Borrow?

A payday lender will often offer borrowers between £100 and £1,000. This is a fairly small amount compared to some lenders but it can be handy to know that there is a lender that will let you have manageable amounts that are not too daunting with regards to repaying them. It is worth noting though that if you are a first time borrower you may not be able to borrow too much. This is because lenders will not do a credit check and so they will need to build up trust with customers in other ways. They will therefore just lend them a few hundred pounds to start with and if they pay that back successfully, they will then be happy to lend them a higher amount of money.

How Long do I Borrow for?

A payday loan will not last for long. The idea of the loan is that you have some money to keep you going until you next get paid and therefore you will have to repay the money on your next pay day. This could mean that you will only borrow the money for a few weeks or even just for a few days. This can be really handy for those people that do not like being in debt as it will not last for very long.

How Quickly Can it be Arranged?

As payday loans are designed to help put in emergencies, then they are often arranged very quickly. There are some lenders that will get you the money within a few hours of applying. This will vary between lenders though and so if you do need the money really quickly, you will need to check with the lender to see how long they take in order to make sure that you will get the money on time. There are also some lenders that will be open all of the time, so at weekend sand overnight and that can be handy if you need money at those times. Not all will offer this though so again it is something that you will need to check out before deciding on the specific lender that you are going to choose.

How Much Does it Cost?

A payday loan can be more expensive than some other types of borrowing. This is because they will lend to people who have had financial problems in the past and are therefore taking a risk. The people they lend to are more likely to not be able to afford to repay the bad credit payday loan and therefore they charge everyone a bit more money so that they can cover the costs of those that do not repay. As with everything that you buy, you will need to think about whether you feel that the loan with offer you good value for money and this will depend on how urgent your need is for the money.