Bad credit payday loans have received a great deal of bad press in the past but most of it is perhaps unfair. We say this because if the product is used correctly it can work as it is intended to work. If you are considering payday loans for very bad credit, check the information below to ensure that this is the right financial product for you.
Payday Loans UK Bad Credit May Be A Lifeline
Payday loans in the UK may be a lifeline for those with bad credit if the loan is used how it was designed to be utilised, over the short term in an emergency.
If they are abused, as with any loan, you can find yourself getting deeper into debt. We do not sugar coat this fact, as it can be true. Payday loans do typically come with higher rates of interest than other loans might. However, this has to be weighed up against the fact that this type of loan offers the chance for people with bad credit to get their hands on the money fast. In a financial emergency, this can be a lifeline.
You might find yourself suddenly without a car if a tire blows on yours and you do not have money to purchase a new one. A payday loan could give you the money to acquire a new tire and have it fitted.
While this means you will have to pay interest on the loan, it could work out a lot cheaper in the end. Without a car, you are going to have to find the bus or train fare to travel to and from work and this is not cheap. At the same time, you will have to make provisions for taking the children to school and home, again on public transport. Life can get very difficult. In the end, the travel costs may amount to the same amount of interest on the loan and you have had to cope with the added stress.
With a payday loan, you could have borrowed the money, had the new tire installed and perhaps have been without the car for just a day, if that.
Of course, this is just one instance in which a payday loan might work for you.
How the Payday Loan Works
Payday loans are taken over the short term. The payday loan is generally repaid when the next payday comes around, typically a month. The least amount of time you take the loan over the less interest you pay.
Some lenders offer payday loans over two or three months, of course, you will pay more interest back. On the plus side, it makes the loan more affordable as you can spread the repayments over three pay checks. This is something that you have to take into consideration when applying for the loan.
The payday loan only works as it was designed if you can repay within the period. Providing you can do this; a payday loan may be a suitable way of tiding you over in an emergency.
Payday Loans Are Capped by the FCA
In the past payday loans had a bad name due to the fact they came with high-interest rates. However, the Financial Services Authority (FCA) now caps payday loans. This means there are limits as to the amount of interest along with default fees that lenders can charge.
Along with this, there have been calls for the FCA to apply the same ruling to other financial products.
We work with lenders offering some of the most competitive rates for payday loans for very bad credit. Lenders we work with also offer numerous loan options and personal loans that are affordable. Our lenders base loans on verifiable income as opposed to credit history.
Responsible Borrowing for Bad Credit Payday Loans
Here at Bonsai Finance, we encourage responsible borrowing. Before taking on any loan be it a payday loan for very bad credit or a personal loan, we ask that you ensure you can repay it and not leave yourself short on the next payday.
Bear in mind that when taking out a payday loan you are going to find yourself short of money at your next payday if that is when the loan is due. This might lead to a vicious circle of borrowing then repaying on the next payday, only to find yourself having to apply to borrow again, and so on.
Applying for Payday Loans UK Bad Credit
Submitting an application for payday loans with our help is straightforward. Within minutes, you could find out if you are accepted for a loan.
To be eligible to apply we need to know:
- You are at least 18 years of age;
- You have a regular income coming in;
- You have a debit card and a UK bank account;
- You can create a direct debit.
We then match you to our lenders who will decide if they can offer you a payday loan based on the amount you have asked to borrow and the term you want to repay the loan.
If you are approved the money could be paid into your bank account fast.
The lenders we work with offer rates that are highly competitive on payday loans for very bad credit. Lenders do not focus totally on your credit rating but on your ability to repay the loan now.
Bonsai Finance helps to match you with lenders offering affordable loans so you can get an instant decision and cash in your account fast in case of emergencies. Payday loans may not be suitable for everyone, but providing they are used correctly, and you are a responsible borrower, they do offer a cash injection in case you fall short in an emergency.