We’ve all been there – that horrible feeling when you know your finances won’t stretch to the end of the month and you need a fast cash injection to help you manage. If you have a less than perfect credit history then you may be finding it difficult to get credit from the more traditional lending institutions. You may find, however, that there are payday loans that may be available for your short term lending needs.
Credit issues
Many traditional lenders will carry out a credit check before advancing loans.
Because of the nature of these loans, typically for largish amounts of money being borrowed for periods of sometimes many years, they may only consider those with exceptionally good credit histories to be an acceptable risk.
Pay day loans are different.
They are:
- for relatively small amounts of money, typically £80-£250, although more can be available in certain circumstances;
- borrowed over relatively short time periods counted in days or several weeks rather than months or years.
This means that the perception of risk of default for payday loan lenders may not be the same as for traditional lenders.
They typically will still carry out a fast credit check but obviously their different views on risk may have a knock-on effect on their acceptance criteria.
So while there is no such thing as a guaranteed payday loan, it may be possible to get one even if the more traditional lending route is closed to you
What you’ll need
The requirements for applying for a payday loan vary among providers but you’ll typically need:
- a job with a predictable pay date;
- to be looking to borrow an amount of money that makes sense in relation to your income.
Bank account
Applications for payday loans can often be carried out completely online without any paper work or cheques in the post. The monies are typically paid directly into your bank account.
Debit card
The repayment of a fast cash payday loan is typically made via a debit card transaction on the same bank account that the loan was credited to. You don’t have to remember to do anything.
Employment
Payday loans are available only to those in employment and since the repayment date is fixed when you take out the borrowing, you need to be confident that the money will be there to make the repayment.
Sensible amount
Another way of looking at fast cash loans is to consider them as an advance on your next pay. Since the advance is taken off in its entirety on your payday, you have to be able to afford this repayment without getting into a borrowing and repayment loop.
Of course, if you are currently experiencing credit problems, then a payday loan may not be the most appropriate solution for you.
This type of lending is available for those who can afford to pay the whole amount back (plus interest and any other fees) in one go on their next payday.
If you are already struggling from one month to the next you may not be able to honour the repayment. This can lead to additional interest charges on payday loans and possibly late payment charges, which may make your overall position even worse. If you are in serious debt, specialist advice may be advisable rather than simply borrowing more money.