What are Bad Credit Payday Loans?
While having good credit is preferable, many lenders offer payday loans even if you have bad credit. Bad credit payday loans provide funds to people with poor credit history by mostly relying on their current capability to pay back.
The term ‘payday loans’ originates from the loan characteristic which has to be repaid on the borrowers' next payday. These loans provide relatively small amounts of money and are mostly used to overcome urgent matters.
What Is Bad Credit?
Bad credit refers to a poor evaluation result of your financial matter based on your credit history, which is calculated and determined by a credit score. A credit score is a three-digit number used as the standard to define your credit status, ranging from 300 to 850 as below.
- 800-850: excellent credit
- 740-799: very good credit
- 670-739: good credit
- 580-669: fair credit
- 300-579: bad credit
Having a low credit score may lead to very limited loan options. The score however is not a permanent number and you can improve it over time to open up more loan options.
Benefits of Payday Loans for Bad Credit
Besides the quick access enabling borrowers to overcome financial crises, payday loans for bad credit have some other benefits:
- Have one of the highest availability rates making them almost always accessible to anyone.
- With small amounts that are available in relatively short terms, you have a better chance to pay off the debt without extending the term.
- Have less strict requirements and the application tends to be easier.
- These loans are mostly unsecured, meaning that they don’t require collateral. So, you don’t risk losing any of your assets.
|How much can I apply for?||£100 to £5,000||Zero-obligation quote|
|Length of the repayment||1-36 months||Quick payout|
|Interest rates (variable)||49.7%||Zero paperwork|
|Can I apply with poor credit standing?||Yes||Bad/low credit considered|
|Do I have to pay a lump sum?||No||Flexible repayment|
|When am I allowed to apply?||24/7||2-min simple application|
How to Know If Bad Credit Payday Loans Are Right For You?
This type of loan unfortunately comes with a higher interest rate, so you must make sure you read the repayment terms before proceeding. An initial soft search will be carried out, so the lenders can see if they can help you. A Hard credit check will then be carried out by the lender that tentatively accepts your application, before they confirm same day pay-out.
If the application is successful, you would have a chance to improve your credit rating by steadily paying off the loans. However, you have to be cautious because missing payments would lower the credit rating and due to the high interest, it might be difficult to complete the repayment in the long run.
How Can UKBadCreditLoans Help You Get Bad Credit Payday Loans?
Our service matches your loan application to potential lenders that most likely have the right offer for your situation. How? You can simply do the following steps:
- Fill in your information: Submit your loan request on our website so we know what kinds of lenders you are looking for.
- Instant decision: You’ll receive an instant decision, if accepted – review the terms and conditions.
- Receive your money: The money should come to you within a few days after signing the loan agreement.
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Representative Example: Rates from 43.1% APR to 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £1,200 borrowed for up to 75 days. Total amount repayable is: £1506. Interest charged is 0.34% per day, amounting to £306, annual interest rate of 124% (variable). Representative APR: 49.7% (variable).
Things to Consider Before Applying For a Bad Credit Payday Loans
While bad credit payday loans may offer the right solution for your financial necessity, you should always be aware of the risk, before making any decision. Consider the following points:
- Interest rates for bad credit tend to be high
- Loan fees should be included in your total calculation
- Lenders would charge late repayment fees if you miss payments.
- Unable to complete the repayments would damage your credit score.
Therefore you are advised to only take out a bad credit payday loan if you are certain you can afford the repayments and are in a situation to repay on time.
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What are the disadvantages of payday loans for bad credit?
Bad credit payday loans have some disadvantages as below:
- Higher interest rate.
- Shorter payment terms. Unexpected expenses may easily cause you to miss payments.
- The loans might be treated as general loans which can cause higher costs.
Can bad credit payday loans affect my credit score?
A loan application requires a credit check which will be added to your credit history, stated as approved or declined. Having many decline notes may lower your credit credibility as lenders can see the reports.
How can I increase the chance of getting accepted?
Below are things you can consider to improve your acceptance chance:
- Make sure all accounts on your credit report are being paid.
- Take chances to get more income and reduce non-priority spending.
- Make sure not to apply to lenders that most likely would decline your application.
How quickly can I get the money?
If your application is approved, you may receive the money as fast as within the same day. However, it is not always the case depending on the lenders and the circumstances. For example, approval late at night may delay the money to the following day.
Does a bad credit payday loan require a guarantor?
Lenders that offer bad credit loan options are willing to overlook your bad credit so you won’t need a guarantor unless the lenders are specialists in that matter.
What are the alternatives to bad credit payday loans?
Some alternatives for bad credit payday loans include:
- Guarantor loans.
- Peer to peer loans.
- Credit card for bad credit.
- Credit unions.