A payday loan is a type of loan which many people find very convenient. It is quite different to many other loan types but many people will worry about trying to apply for it if they have a poor credit score. However, this is not something that you need to be concerned about with a payday loan.
Credit score and payday loans
A payday loan is unique in that the lender will not do a credit check. This means that it does not matter what your credit score is as you will be approved for the loan without a check being done. There will be other things that are checked, but not very much and so it is very likely that you will be approved. There will be an age check as minors cannot borrow money and you will need to prove that you are a UK resident. You will also have to have a regular income and a checking account. These are things that most people have and so it is very unlikely that anyone will be turned down for a loan of this type. This means that it is a loan that is suitable for a lot of people. It is important to note that if you have a good credit score then this will not eliminate you form being able to have a payday loan, as with no credit check taking place, it means that anyone can apply. If you do have a good credit score, then you will be more likely to get other loans offered to you, but you may find that you prefer the payday loan anyway. It has a lot of features which are different to other loans which can make it more appealing to some people.
Other features of payday loans
There are other things that make a payday loan stand out form others. One of the other main ones, apart from not doing a credit check, is that they are very quick to arrange. In some cases, it can take just a few hours to get the money that you need. This means that if you need money in an emergency, then you will be able to get it very quickly with a loan like this. With other loans it can take days or even weeks to get approval for a loan and by then it might be too late for you to be able to use the money.
A payday loan is also very short term. You will be expected to repay the loan when you next get paid. This is done by setting up a direct debit for the full amount owed to go out on your pay day. So as soon as pay check appears in your checking account, you will be able to repay the loan. This being done automatically means that you do not have to remember and therefore takes the stress out of it. You will need to make sure that there will be enough money to repay the loan. You need to consider whether you pay will be enough to cover the loan and any other direct debits that will go out on that day. You will also need to make sure that you can manage for the rest of the month when you have that money missing from your account. You should be able to work this out and come up with a plan where you can budget and spend a minimum amount so that you can afford things.
Paying the loan back quickly means that you will not have the loan for very long. This can be really great, especially for those people that do not like being in debt. It can feel like a long burden to have to keep making monthly repayments and so to be free of this and just make one payment and get the loan over and done with can be a great relief.
How to choose whether to get a payday loan
It is important to make sure that you are aware of how payday loans work and then you will be able to make an informed decision as to whether it is something that you want to take on. There are lots of loans that you might be able to choose form although if you have a poor credit record then your choice will be much more limited, as it will be if you need the money really quickly. It is good to find out the cost and consider whether the repayment schedule will suit you. Once you have done lots of research you will have enough information to decide whether this type of loan will suit you and your needs. It may take time to look up all of the information that you need but it will be worth it. If you make the right decision then you have a positive borrowing experience that will suit your needs well. If you do not pick the right one then you could have a negative experience that you regret.