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21 Aug 2019

An In-depth Look into Payday Loans UK Bad Credit Considered

Payday loans have faced a great deal of controversy in the past. However, for millions of people in the UK, they have proven to lend a helping hand in times of financial need. Here we aim to provide an in-depth look into payday loans UK bad credit ratings considered.

Throughout this article, we are going to look at:

  • Why do payday loans have such a bad name;
  • Is it worth considering a payday loan?
  • How payday loans Work;
  • The APR on payday loans;
  • Benefits of a payday loan;
  • Apply for a loan online.

How Did Payday Loans Get A Bad Name?

The first thing we want to talk about is whether these types of loans are as bad as have been made out in the press and why they earned a bad name.

So where does the bad reputation that follows them come from?

Payday loans become popular during the 90s when the economy was in good standing and incomes on the rise. This meant that there were few problems in repaying them.

During the 90s, some unethical lenders relaxed the conditions for applying for payday loans. They offered people who stood little chance of repaying the loan credit. They did so believing the economy was going to continue improving and people would be able to afford the repayments.

However, towards the end of 2000, the market collapsed and lenders wanted the money back from those they had allowed to borrow, implementing tough collection methods.

Lenders boosted the cost of loans and this meant people had to pay higher rates of interest. Some unethical lenders allowed people to roll payday loans over, which led to high fees along with more interest being added on.

Payday loans earned themselves a bad name and that bad name has stuck ever since. However, it has not put people off from applying for the loans.

Many people do not know which way to turn in regards to payday loans. With wages falling and the outcome uncertain in 2008, people still turned to payday loans. However, many could not repay them and the press began to highlight the fact that lenders were encouraging people into a payday loan trap.

Should I Apply for A Payday Loan?

Thankfully, the FCA stepped in and since 2014 interest and fees on payday loans have been capped.

With incomes still being low compared to the cost of living, the loans have remained popular.

So, should you apply for a payday loan or pass them over?

Payday Loans Can Work As Intended

What is important to consider is that payday loans can work as they are intended to work. It is not the loans that are at fault, but the unethical lenders who offered them.

Many unethical lenders were forced to close and the industry is now regulated.

Payday loans can and do work if they are taken out as intended. To offer a small cash sum of money for emergencies that is repaid back quickly.

There are ethical lenders out there who offer loans in the region of £100 to £500 that can be repaid within one to three months.

Lenders, such as the ones we work alongside, offer loans after checking for a verifiable income and weighing up if the loan is affordable.

Providing you repay the loan as agreed on the date or dates agreed, the loan can and does work.

How Payday Loans Work

A payday loan can be taken out for just about any reason but generally, people apply for the loans when they come up against a financial outlay and do not have enough money to cover the outlay until payday.

They apply for a loan of between £100 and £500 and work out with the lender when they will repay it. This is on their next payday or spread out for up to three paydays.

What is important to bear in mind here is that the longer a payday loan is taken out over the more interest it will accumulate. Therefore, the more you have to repay in total.

Providing you understand this and have worked out you are not going to be left short when payday comes around, the loan can work as intended.

APR On Payday Loans UK Bad Credit Considered

People who consider payday loans UK bad credit considered can be confused by the APR on payday loans. This does not do the loan any favour and goes towards giving them a bad name and being called expensive.

Payday loans are often advertised with an APR of around 1,500%. This is in comparison to the APR on credit cards of around 22.8%. As you can see, there is a huge difference.

However, there is also a huge difference between the two types of borrowing.

When borrowing with a credit card you can borrow up to the sum of money offered by the lender and repay back over many years. You pay a monthly repayment, which includes repaying some of the balance and interest.

With a payday loan, you are only borrowing for one to three months. You agree with the lender whether to pay in one lump sum on your next payday or spread it out over up to three months. This means you are not going to have to pay the APR, as you are not taking the loan out over the year.

The Benefits to a Payday Loan

Providing you know how much the total cost of the payday loan is and how much the lender is going to take back out of your paycheck and it is affordable, there are many benefits to a loan.

  1. Applying for the loan is fast and easy online;
  2. Lenders will consider all circumstances, even people with poor credit ratings;
  3. The whole loan application can be undertaken online;
  4. You get an instant decision;
  5. Lenders consider verifiable income;
  6. If you apply for a loan with our help you get access to a large panel of lenders;
  7. You get access to ethical lenders offering affordable loans;
  8. You can pay the loan on your next payday or spread it out over three paydays;
  9. You get access to cash fast if approved, often on the same day as you applied;
  10. You may be able to get between £100 and £500 paid into your bank account.

If you are responsible with borrowing and have made sure that the loan is affordable there is no reason why the loan cannot work as it is intended.

We Can Help You to Find a Payday Loan Fast

The majority of people who apply for payday loans do due to the fact they need to get hold of money quickly.

Payday loans are usually applied for to cover unexpected expenses such as bills, repairs and unauthorised overdrafts. However, anyone can apply for a loan for any reason, as the lender generally does not need to know how you want to spend the money.

Fast Affordable Loans All Circumstances Considered

Finding a loan on the high street is almost impossible if you have a poor credit rating. Looking online is often the best course of action and even better is to apply for a loan with our help.

We do not offer loans ourselves but we work with a range of lenders who do and who consider all circumstances.

Just decide how much you want to borrow and when you can pay it back and we can search with a panel of lenders and provide you with an instant decision.

Payday loans can be applied for online in minutes and if we match you with a lender, you can look over the loan details to make sure the loan is right for your needs.

Make One Loan Application Search with a Panel of Lenders

One big advantage of choosing us to apply for your loan is that you only have to fill in your details once to be able to access a wide range of UK lenders. You could, of course, make an online search yourself but you might have to make numerous applications before finding a lender that approves you. All of these searches are noted on your credit file and make you look desperate, which goes against you.

Of course, searching yourself also takes a great deal of time, which may be time that you do not have if you need to get hold of money fast in an emergency.

In the time it might take you to find a loan yourself, we could have found you a loan and the money might have been paid into your bank.

Apply for payday loans UK bad credit accepted with our help with a panel of UK lenders who consider all circumstances and offer affordable loans with competitive rates of interest.

Here are some other interesting articles from out website:
How Easy Is It To Get Payday Loans Bad Credit No Guarantor Needed
Is It Possible to Get Guaranteed Payday Loans for Bad Credit
Do Lenders Offer Guaranteed Payday Loans for Bad Credit