Payday loans revolutionised modern day credit, some say for the worse, many for the better. One things for sure, a huge percentage of the UK uses payday loans and rely heavily on this credit line to bridge the gap between now and payday. In short payday loans has helped a lot of people.
It used to be that having a poor credit score meant that acquiring a loan, no matter the amount, was nigh on impossible. That’s all changed now, and a far higher percentage of the UK has access to payday loans which are essentially short term loans for small amounts of money.
To this day, going the traditional route through lenders such as banks, building societies, and credit companies, can leave you stressed and empty handed as those institutions still use your credit report and credit score to judge whether or not you are eligible for one of their personal loans.
If you’re asking yourself “So, can I get a loan even if I have a poor credit score?” The answer is “YES, you can. With a payday loan.” And, the best bit about payday loans (and this also includes bad credit loans) is the Financial Conduct Authority are on top of loan fee fraud. Things are so much safer and fairer in the payday loans sector now for consumers thanks to the FCA.
Payday loans – UK availability and alternatives
Life here in the UK is comfortable when compared to a lot of other places around the world, but that comes at a cost. The price of clothing, food, petrol, and of course housing costs such as rent and bills are all relatively high and luckily Payday loans in the UK has wide availability. You can get loans for all walks of like for example student payday loans.
Sometimes balancing all of these costs can be like walking a tightrope and one hiccup or unforeseen situation can tip you in the wrong direction financially. Usually these problems are only temporary, but it can still knock you back and have you struggling to get back onto your feet, and this is where payday loans in the UK can offer you some breathing space.
A UK payday loan can get cash to you when you need it and it doesn’t require you to go around visiting various bank managers and then waiting around for their decision. These loans can be applied for, finalised, and then the funds transferred to you in a very short period of time, all from your home computer. But before you go ahead and take out a payday loan, it’s always worth considering the alternatives. The Money Advice Service have helpfully included a guide that shows you alternatives to payday loans which includes asking your boss for pay in advance, asking to borrow from family and friends, as well as trying to use a credit card. For more information you can check here: https://www.moneyadviceservice.org.uk/en/articles/alternatives-to-payday-loans
Bad credit payday loans: direct lenders only
As we already mentioned, payday loans are not offered by your bank manager who has to follow a strict set of guidelines set out by his employees, but by direct lenders who specialise in bad credit payday loans. Because of this, your application can be looked at on a case by case basis, and the decision to grant you the payday loan rests solely on the direct lender, and is therefore a much faster process and far more agile.
The direct lenders of payday loans only require that you can show that you are able to make the repayments set out in their loan offer, as well as some other basic personal information, and won’t get hung up on problems that you may have had in the past so long as they can understand your financial situation and believe a loan will not cause you financial difficulty. There’s every chance you can get a loan.
If you have a full time job and are able to make the repayments, you have a good chance of being accepted by a direct lender for bad credit for payday loans.
Quick payday loans
When life throws something unexpected at you like emergency car repairs, having to replace an electrical appliance, or some dental treatment, you need money in a hurry and that’s where quick payday loans come in.
Going to a bank for a loan takes time. Not only the time spent actually going for a face to face meeting and having to answer endless questions and fill in even more endless forms, but also the time it takes for you to hear back from them regarding their decision. In the meantime, your car is still sat in the garage, or your microwave is still sat on your kitchen side, broken. Hardly ideal.
Quick payday loans can be applied for in less than half an hour, completely online. What’s more, you will usually get your answer back within 24 hours, and even better than that, the money can be transferred into your bank account as soon as you accept the terms of the loan from the direct lender, instantly.
No waiting around. The money can be there when you need it most.
To speed up the process even more, and to make sure you are getting the best deal possible, it is a good idea to get assistance from a payday loan broker.
Payday loans online – the alternative to high street lending models.
The internet has made easy work of payday loans online. We need not do more than load a web browser, input a simple search like ‘payday loans’ and no less than a hundred companies, both broker and lender alike are ready and waiting to take the enquiry. That makes credit lines extremely easy and transparent which is a great thing and something the internet has helped almost every person with.
If you’re looking for online payday loans then please feel free to drop us an enquiry and we would be more than happy to help you connect with dozens of willing lenders that are ready to take your enquiry and act on it quickly. With so many payday loan offers online you’re sure to get the very best service possible and decisions on your applications in minutes in some cases.
Help understanding payday loans
Still feeling like you are not clear about how payday loans work?
No problem, here we will address a few common questions about these types of bad credit loans in greater detail and highlight a few points so that you feel better informed about the whole process.
What are payday loans?
Payday loans are short term loans, usually for smaller amounts than traditional loans and can be for anything from £100-2500 pounds although they are most commonly in the lower end of that scale.
They are designed to be applied for, processed, paid out, and repaid quickly and that makes them ideal for people who are in need of fast cash for whatever reason.
In fact, a lot of the direct lenders who offer these loans won’t even ask what you intend to spend the money on, and are only interested in how you intend to pay back the money you borrowed.
Payday loan lenders have their own criteria for deciding who is eligible for their loans and don’t follow the same strict parameters and factors that are favoured and used by traditional lenders. That means that even though you may have been refused for a loan or credit card because of previous credit problems, you may still be able to get a payday loan.
How do payday loans work?
Payday loans work in a similar fashion to any other loan; you borrow a certain amount of money and then you pay it back plus interest.
The main difference is that payday loans are usually for smaller sums of money and are meant to be paid back much faster than a traditional loan. For example, if you only borrow a couple of hundred pounds, you might be required to pay it off within a few paydays.
Obviously, the faster you repay the loan, the less interest you will have to pay, and this flexibility with these loans is just one reason why they are so popular in the UK at present.
When you apply for one of these loans, you will provide the lender with your bank account details so that they can instantly transfer the funds should your application be successful and you accept their offer.
This account is also the one that you will make your repayments in the form of a direct debit on the agreed dates. It’s a simple system that works well.
Another difference between bank loans and payday loans is that when a bank manager turns you down, that’s it. Game over.
However, payday loan lenders might offer you a lesser amount than what you asked for rather than turning you down flat. It all depends on how they have assessed your ability to pay back the amount you asked for, so it is very important that you give very accurate information when you originally apply for a payday loan.
How long do payday loans stay on a credit report?
Credit reports are files that are kept on you by credit reference agencies (CRAs). They are a detailed compilation of all your credit transactions, good and bad. Every time you apply for a loan, every bank account you have, and more, is recorded by these agencies and then given to banks and credit card companies to scrutinise when you ask to borrow money from them. Three of the biggest RCAs are Experian, Equifax, and Call credit. Just to be clear, we offer a no credit check loan service* as a broker but the lender will perform a credit check if you accept an offer, this is why you see quite a lot of misleading information with regards to credit checks. A broker is telling the truth – he will not credit check you, but that doesn’t mean the lender won’t.
In general, negative entries into your credit report like missed payments and such, will stay on there for around 7 years with bankruptcy being the exception and staying on the report indefinitely. It means that bad credit loans will probably be your only near term option for credit.
However, there are ways to improve your credit report and score such as repaying debts, closing old and used bank accounts, and generally showing that you have changed your borrowing habits from bad to now good.
Repaying a payday loan in prompt fashion will actually do you a favour in that regard as it will be seen as a positive thing, showing that you are willing and able to repay the money that you borrow. Of course, missed payments and problems with your payday loan repayments will have the opposite effect and damage your credit score further.
What if I can’t pay off my payday loan? Can I get help with debt?
If you miss payments for any type of loan, there are consequences, and payday loans are no exception. These consequences can vary from lender to lender and loan to loan. For example, some will charge you a late repayment fee while others will increase the interest rate on your loan. It is very important that you are clear about the possible penalties of a payday loan you will have imposed for missed or late payments agreeing to any loan.
Remember always check that you are happy with the payday loan offer before signing. The Citizens Advice Bureau are very clear on how to handle payday loans:
Don’t get caught out, be fully aware of your situation and always remember there is free help and advice if you get into debt difficulty:
Most reputable payday loan lenders will have this laid out for you, as well as the payment plan and any initial fees, in a clear and easy to understand way so you can go over the numbers before you make a decision.
To make sure that you are dealing with the best direct lenders out there, it is my honest advice that you enlist the help of a payday loans broker. These brokers will only require you to apply with them once. Then they will act on your behalf and contact multiple lenders, looking for the best loan conditions for you. They will then present you with the offers. You can choose whichever you feel is the right one for your current situation.
As we mentioned above, missing payments or being late with them, will affect you credit score in a negative way. Please be sure that you are able to pay back the loan in the agreed fashion or you could find yourself getting into further financial trouble.
Payday loans can be a great way to solve a short term cash flow problem and even be a start towards mending your credit score. However, if you go into them without proper consideration, they can turn into just another headache.
Which payday loans will accept me?
Having a bad credit score will not prevent you from being accepted for a payday loan because direct lenders do their own version of credit checks which are far less stringent and more focused on the things that really matter.
However, there are still some requirements that have to be met in order to qualify for a payday loan.
Firstly you have to be at least eighteen years old and also be a UK resident. You also have to be currently employed or at least able to show a record of income that proves you will be able to make the required repayments without trouble.
You must have a current bank account for the funds to be transferred into. This is also for making the direct debit payments from, and you are not allowed to have any existing, outstanding issues.
If you can match this criteria, and have the necessary documentation to prove it, then it is possible to get a payday loan and guaranteed that your application will be looked at closely. All you have to do next is find a good direct lender to borrow from and fill in the application form.
You can also register with a payday loans broker to save you time and also to give you the best chance of finding the best loan in the UK. Filling in a single form with a broker is far more convenient. It will save repeating the process over and over for each individual lender.
Can I get a payday loan online?
Yes, getting a payday loan online is fast becoming one of the easiest ways to gain quick credit and allows for those with bad credit too. The most important part of online payday loans and eligibility criteria include your age, job status, residential status, valid bank account, and a mobile phone is handy to look at offers you’re sent back too.
What with loans being so easy to obtain online it makes sense that you apply with as many people as possible in order that you can be sure of receiving the best payday loan deal possible.
Can you go to prison for not paying back a payday loan?
Absolutely not. If you are approached by a lender or a collector and it is suggested that you may end up in jail as a result of not repaying a payday loan then you should contact the Financial Ombudsman and complain about your payday loan lender or broker immediately. No genuine licensed credit broker or lender would put themselves in this position on purpose. They have worked very hard for their license and uphold the law as best they can. This would be a complete breach of trust. I cannot see how it would happen in the new fairer payday loans market for consumers.
Compare payday loans for the best deals
Please note the table provided is purely an example only and in no way indicative of your actual loan offers. You’ll quickly notice when you compare payday loans that the longer the loan period, the more the interest accrued. Paying off short term loans as quickly as possible will make them far more affordable.
Compare payday loans
|How much money do you want to borrow?||How many months we borrow for?||Monthly APR example Representative 1266%||Loan total||Monthly repayment|
Payday loans differ from traditional loans in several ways that are all beneficial to people with bad credit history who are looking to borrow money fast. Unlike banks and credit card companies, payday loan lenders don’t let your past mistakes affect your ability to loan money from them, and are far more interested in your current situation.
These lenders can offer short term payday loans to people in need of an emergency cash boost, even if previous situations have forced a bad credit score upon them.