Can I Get A Payday Loan If I Have Bad Credit?

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It is stressful to be stuck in a financial bind, and having bad credit can make this situation worse. Whether you need money to pay utility bills or to buy groceries, you may think of taking out a payday loan. Thousands of people are searching for payday loans for bad credit scores every day on the internet to overcome their short term financial challenges.

 

Typically this loan is a short term loan that needs to be paid back on your next payday. It is designed for people who need quick small loans but finds it difficult to get them because of their poor borrowing history. If you are searching for an emergency payday loan with bad credit and need more information, then your search is over.

 

In this article, we are going to describe all the necessary information about online payday loans for bad credit. But, before getting into a payday loan, let’s see what bad credit means.

What Is Bad Credit?

Bad credit refers to an individual’s history of failing to pay bills on time. It is a term that is usually used to describe the financial situation of a person who has a poor history of financial management. People with poor credit scores are likely to have missed credit payments such as utility bills or loan repayments. The timeliness of your credit card payment has a great impact on your credit rating.

 

Essentially, poor or bad credit is the main reason that some borrowers find it difficult to take loans from banks and high street lenders. Bad credit is an indication to lenders that one borrower is riskier than the other. Therefore, it is vital to keep your credit score high so you can secure a loan easily in case of an emergency.

What Is A Bad Credit Payday Loan?

A bad credit payday loan is a short term and high-cost credit solution for individuals who have a poor credit history. Lenders also offer flexibility in repayments for such lenders and stretch repayment terms to several months instead of a single month. But you should keep in mind that the longer the repayment terms, the more the interest rate you have to pay.

 

Usually, this type of debt comes with a high-interest rate, but the Financial Conduct Authority (FCA) has set a limit on the interest rate and fees that payday lenders can charge. All the authorized lenders have to work within these regulations. However, the interest rate varies from lender to lender, and you have to shop around to find the right deal.

How Do Bad Credit Payday Loans Work?

Bad Credit Payday Loans Work

It is simple and easy to get an online payday loan for bad credit. First, select a lender and make an online application. Along with the application, provide all the necessary information, such as the amount you want to borrow, details of income and expenses and your employment status.

 

When you submit your application, the lender assesses it to know the risks and sets an interest rate according to the credit score. Unfortunately, there are some lenders who do not carry out a credit check and grant quick access to funds.

 

Many people use such loans to fulfil their needs till the next payday, but it is not a restriction to use the loan amount only for this purpose. You can take out a loan to fulfil any short term financial need. However, the amount you can borrow usually depends on your income. Payday lenders offer a loan to everyone no matter what the borrower’s credit score is.

Applying For A Bad Credit Payday Loan

Apply For A Bad Credit Payday Loan

You can get an online payday loan for bad credit through a broker or direct lender. A broker is a middleman with access to the whole market of lenders and matches you with a lender that matches your requirements. When applying for a payday loan bad credit through a broker, you have to provide personal details, the amount you want to borrow and your repayment terms. Brokers will search the market and bring the best lenders that match not only your needs but also those offering competitive rates. They can also tell you how many chances are there for approval of your loan application.

  

On the other hand, when you want to take out a loan through a direct lender, you have to shop around to find the best lender and then make an online application. Always remember that when you apply for a loan through a direct lender, it is recorded in your credit history no matter if your application is approved or rejected. It means the more loan applications you make, the more it will impact your credit score in a negative way.

 

When applying for an online payday loan bad credit from a direct lender, make sure the lender is FCA authorized and also do research such as checking online reviews to know the transparency.

How Quickly Can You Get The Loan?

Payday loans usually offer quick funding, but it depends on the lender. Some lenders have a complex procedure, and it takes a long time to get approval for a loan.

 

When you apply for a bad credit loan, the lender asks for some necessary information such as your name, address, income source and bank account. After the validation of your data, the lender approves your loan application.

 

Once your loan application is approved, the cash is transferred to your bank account, usually within hours. However, payments are not always processed 24/7, so if your application is approved late at night, you have to wait till the next morning to get the cash.

Should You Apply For A Bad Credit Payday Loan?

blog – Apply For A Bad Credit Payday Loan

No doubt, a payday loan with bad credit can provide you with the financial support you need in challenging times. Payday loans are quick and easy to get, and you will get access to funds within hours or the next business day. But it is important to look at the other side, which is the high-interest rate.

 

Because of their high fees, bad credit payday loans are much more costly than other traditional loans. Of course, the decision of taking out a payday loan is up to you, but if you do not consider affordability, you may end up in a cycle of debt that lasts for months or even years. 

 

Payday loans are usually considered a last resort for people with bad credit due to the high-interest rate. If you can not afford to repay the loan amount on time, you should avoid this high-cost debt; otherwise, you can not come out of this borrowing cycle. You can look for payday loan alternatives to get a cheaper loan.

Advantages Of Bad Credit Payday Loans

Advantages of payday loan
Payday loans for bad credit offer numerous benefits to the borrowers. Some of which are as follows:  
  • A bad credit payday loan provides funding to borrowers when they are rejected by all other lenders and banks. 
 
  • It is generally straightforward to apply for such a loan, and some lenders take a few hours in the underwriting process. 
 
  • Payday loans are unsecured, which means you do not need to use any of your assets as a security against the loan. It means there is no risk of repossession.       
 
  • These are usually short term loans and offer small amounts, which means you can repay your debt easily and also do not have to pay interest for a long time.

Disadvantages Of Bad Credit Payday Loan

Disadvantages of payday loan

Along with the benefits, payday bad credit loans have some disadvantages that you should keep in mind: 

 

  • The cost of a bad credit payday loan is higher than the standard bank loan or other traditional loans.

 

  • Generally, traditional loans are long term loans, and any economic changes can impact your repayments. Payday loans are repaid in a short period, which puts pressure on the borrowers.

 

  • Borrowers can use a payday loan as a general loan. As it is a costly way of borrowing, the amount taken out should only be used for the intended purpose and to cover unexpected short term financial obligations. 

Can You Get A Payday Loan With No Credit Check?

The answer to this question is no. According to the Financial Conduct Authority (FCA) rules and regulations, all lenders need to carry out a credit check on all loan applications. Some brokers and lenders mislead borrowers by saying that they are offering guaranteed payday loans, but the fact is that there is no way to ensure whether you will get a loan or not until you apply.

 

 

There is no such thing as a guaranteed payday loan with no credit check. However, some lenders carry out a soft credit check and flexible lending criteria helping people with bad credit in getting payday loans.

Bottom Line

Bad credit payday loans are short term loans that can be helpful for individuals who find it challenging to secure a loan due to their bad credit. However, we suggest you use such loans only in case of emergency and when you know that you can afford to repay the loan on time. It is an expensive way of borrowing because you have to pay high-interest rates because of a bad credit score. If you want to get a payday loan at an affordable rate, you should work to improve your credit score. 

 

If you become successful in securing a bad credit payday loan and make repayments on time, your credit score will improve automatically, and you will easily get a loan in future. There are a number of payday loan providers offering different terms and interest rates, so you should shop around and make price comparisons to find lenders that meet your requirements. If you do not have time to, shop around and look at each lender’s rate. You can use online comparison sites to get quick quotes and save time.