Payday loans have caused something of a stir in the past. They have said to be high-cost loans that attract people with low incomes and poor credit ratings. However, the media never seems to highlight the good points about the loans and the fact that if taken out correctly, they can work as intended. Payday loans no guarantor needed can be a suitable option for anyone who finds himself or herself short of money and who require a helping hand until payday comes around.
What Are Payday Loans?
Payday loans are a type of short-term loan that is very popular among people who have a poor credit rating. They are loans that are generally easy to find approval for, even by people with less than perfect credit history.
The loans are often called same day loans or emergency loans due to the fact they are quick and easy to apply for and are often paid out on the same day as applying. In many instances, funds from the loan can be paid directly into the bank account within a matter of hours of applying.
With payday loans, there is a limit on how much you can apply to borrow. Lenders will usually set limits of £100 and £500 but some may offer slightly more or less.
A payday loan is repaid on the date or dates you are paid, including any interest that has accumulated up until that time.
For instance, if you take a payday loan out for 30 days, thirty days interest is calculated onto the loan and added on to the amount borrowed. The total amount is repaid on your next payday in 30 days times.
To make the repayment more affordable you can choose a longer-term, up to three months or three pay dates. As you might expect the loan will accumulate three months of interest so the total amount payable is going to be a lot more than had you paid the loan off sooner.
Why Consider a Payday Loan?
You can apply for payday loans no guarantor for just about any reason but usually, these types of loans are applied for when you find yourself short of money and you have an unexpected payment to make.
For instance, this might be to pay for repairs if your car breaks down. It could be to pay a large bill you had forgotten about and the final reminder needs paying before your next payday. These are just two instances where you might need to borrow a small sum of money fast and pay it off on your next payday.
In some cases, taking out a loan this way can actually save you money. An example of this might be if your bank account went into unauthorised overdraft. In this case, fees might be added on daily and in many cases, they will end up costing you several times more than the interest repayment on the payday loan.
Payday loans do not require you to find a guarantor either and this is another plus in their favour.
Many people with poor credit ratings are offered guarantor loans, with the loans offered with high rates of interest. With a guarantor loan, you first have to find someone who is willing to stand as your guarantor and take over the loan repayments in the event you find they become unmanageable. This may not be such an easy task and it can cause issues with friendships or relationships.
To be able to apply for a payday loan you do need to be over the age of 18, have a UK home address, a bank account that has a debit card attached to it and a regular income coming in each month.
The Good Side to Payday Loans No Guarantor Needed
Yes, there is a great deal of good in relation to payday loans but this seems to be forgotten and only the bad is concentrated on. So let us look at some of the benefits of this type of loan.
- The loans have an easy application online;
- The entire application is made online without any paperwork;
- They come with an instant decision;
- The loans allow people to get their hands on money fast to meet a financial emergency;
- Money can be paid into the bank on the same day, usually within hours;
- This type of loan is a good option for people with poor credit ratings who have been turned down for other loans;
- It is a loan that does not come with long term commitment;
- The loan can be spread out over one to three paydays.
Payday Loan Myths
There are many myths surrounding payday loans including the fact that ethical lenders are hard to find.
This is not true, although there have been unethical lenders on the high street, many who gave the loans their bad name. However, we work alongside ethical UK lenders who offer some of the most competitive and lowest rates for your circumstances. The lenders we work with will also check loan affordability and will consider verifiable income, not just credit scores.
Another misconception is that all payday loans come with high-interest rates.
Again, this is not true. While payday loans are considered an expensive way to borrow money, you do have to bear in mind that the interest charged is a lot less than what banks charge for unauthorised overdraft fees. Also, while the APR that is offered with payday loans may be in the thousands of percent, that is reflective over the year. You will be paying the loan off within a period of one to three months so you will not pay the huge rate of interest.
Another myth is that payday loans no guarantor needed are only for poor people. Another misconception as people from all walks of life apply for payday loans to get them out of a tight spot when funds in the bank have been depleted.