Payday loans for bad credit

You should get a payday loan as a last resort because of the high-interest rates. Here are a few scenarios where it could make sense to get a payday loan:

• Medical bills: You could get a payday loan when you need to pay emergency medical bills that cannot wait. This could be for surgery or medication that you need to take. 
• Car repairs: Is your car a vital aspect of your everyday life? Then you could use payday loans to pay for emergency car repairs. This ensures you can continue driving to work, picking up the kids from school, and more. 
• Living costs: You can use the payday loan to pay for living costs if you can’t make it to your next pay day. However, payday loans don’t address the symptoms of your financial situation, so only use them as a last resort.
• Travel costs: Do you need to make an unexpected journey that you didn’t budget for? Then you could get a payday loan to pay for the travel arrangements.

Yes, you could get a payday loan with bad credit, although there’s no guarantee of approval. The lender will run a credit check to review your financial situation and determine if you meet their criteria. Also, borrowers with bad credit might pay higher interest rates to offset the risk for the lender. 

Getting approved for a payday loan with bad credit could be harder. Fortunately, here at BadCredit.co.uk, we run a soft credit check to evaluate your financial records and match you with the best lender for your case. This could potentially increase your chances of getting approved for your payday loan, but there’s no guarantee since there are factors outside of our control. If you follow through with the quote you get from us, the direct lender will perform a hard credit check.

It’s possible to receive the payday loan today, but there’s no guarantee. It depends on the time of day you apply for the payday loan and the response speed of the lender. However, you could get the funds in your bank account within a few hours of applying for the payday loan.

You should consider the pros and cons of a payday loan to determine if it’s the best option for you. 

Pros:

• Easier acceptance: Overall, the acceptance rate for payday loans is higher than other types of loans. That’s because lenders view them as less risky. This means individuals with bad credit and low income could have a reasonable chance of getting a payday loan. 
• Emergency money: Payday loans could help you get through tough financial times until your next pay day. This could pay for car repairs, medical bills, and emergency travel costs.
• Improve credit score: You could potentially improve your credit rating if you pay the payday loan on time.

Cons:

• High interest rate: Payday loans usually have very high interest rates. This means they are an expensive way of borrowing money.
• Reduce credit score: You may take a hit to your credit score if you fail to pay the credit loan on time. Hence, you’ll have a harder time getting a loan in the future.
• Debt spiral: If you fail to repay the loan, you may face fees and more interest payments. This could result in a debt spiral that’s tough to escape.

Payday loans in the UK are regulated by the Financial Conduct Authority since 2014. This is the regulatory body that ensures all parties involved in the payday loan industry abide by the law, and this includes payday loan comparison websites like BadCredit.co.uk. 

Regulation in this industry benefits customers because it provides transparency and fair financial practices. However, you should still compare lenders and pay attention to the details. For example, reading the terms and conditions will help you uncover the small details.

The factors you should consider when comparing payday loan lenders include:

• Interest rate: Choose a payday loan lender with the lowest interest rates. Here at BadCredit.co.uk, we strive to match you with the cheapest payday loan lender that’s appropriate for your financial situation. 
• Additional fees: Consider the added fees that you might be charged by the payday loan. This can include a fee for paying back the loans early. Also, BadCredit.co.uk, doesn’t charge a fee for providing a lender match or quote for a payday loan. We may make a commission from your matching lender.
• Reputation: You should do background checks on the lender you plan on using. Reading about the experiences of other borrowers will help you set the right expectations. BadCredit.co.uk compares 70+ FCA authorised providers and lenders.

Lenders have to run a credit check when applying for a payday loan since it’s required by the Financial Conduct Authority. However, when using BadCredit.co.uk, we initially run a soft credit check. This goes on your credit history, but it’s only visible by you and not 3rd parties. A hard credit check is performed upon formal application.

It’s important to avoid getting a rejection from your payday loan application since that could negatively impact your credit rating.

There are scenarios where avoiding a payday loan might be the best course of action. In those instances, you need to seek alternatives. Here are a few examples of when to not get a payday loan:

• You lost your job: You might be tempted to get a payday loan to cover living expenses after losing a job. However, this could be a recipe for disaster if you cannot afford to pay it back. Also, the lender will discover that you are unemployed, which means there could be a high chance of getting rejected. 
• Pay off debts: It doesn’t make sense to get a payday loan to pay off a debt. That’s because you’ll need to pay off your payday loan, which typically has a high interest rate.
• Pay off overdraft: It’s understandable to pay the overdraft once in a while by using a payday loan. However, you shouldn’t do this often since it leads to a lot of interest payments. Instead, consider getting rid of your overdraft to avoid being tempted to use it.

You do not need to put up collateral when getting a payday loan, which is one of its attractive aspects. This means that it’s an unsecured loan. However, payday loans have high interest rates, and that’s how lenders offset the risk when there’s no collateral.

The alternatives to getting a payday loan include:

• Friends and family: You could ask your friends and family to loan you money. The advantage is that there’s usually no interest, and the amount of time taken to repay is flexible. However, the downside is that it could ruin your relationship. 
• Guarantor loan: A guarantor loan involves getting someone you know to cosign the loan agreement. This means they will be liable to repay the loan if you cannot. Also, the guarantor needs to have a good credit rating.
• Overdraft: You could get an overdraft with your bank account if it’s offered by your bank. The interest rate might be more favourable, and some overdraft deals could be interest-free with new bank accounts.

When you cannot repay the payday loan on time, you should first speak to your lender and see if you can come to a reasonable repayment restructuring.  If that’s not possible, you could get a consolidation loan. This is a loan that allows you to pay off an existing loan with the purpose of improving your financial situation. For example, you could extend the repayment time and potentially get a better interest rate. Also, you could ask your friends or family to loan money to cover the payday loan amount.

You don’t have to repay your payday loan with your next pay day, but it varies based on the rules set out by the lender. Payday loans usually refer to a short repayment period of up to around 3 months or less. Therefore, a payday loan could make sense if you can make repayments within the next couple of pay days.

You can know if a payday lender is legit by searching for their name on the Financial Services Register. Make sure that it’s the same name as on the website. It’s important to check if a lender is a legitimate company so you don’t get scammed. 

Here at BadCredit.co.uk, you’ll have 70+ providers and 30+ loan lenders that are FCA-authorised. We can vouch for their legitimacy in providing financial services such as payday loans.