Bad Credit Payday Loans
- Borrow £100 to £1,000
- Same day payout
- Affordability is key
- Instant decisions
- Credit rating less so
- Alternatives available
Payday Loans for Very Bad Credit
“Bad credit” doesn’t mean what it used to. A decade ago it could have implied gross mismanagement of your finances. But in today’s post-banking crisis, post-covid world there are many people who have – and still do struggle with – financial complications caused by these events.
A blemish caused by a few missed repayments is enough to mark you as having a “bad credit history“. That’s why there’s a need for bad credit payday loans.
All the more frustrating is to be labelled as a “bad credit risk” when you are in steady employment with a steady income. But it’s quite typical for today’s cautious banks to refuse to lend even though you could afford to repay the loan.
Affordability - says more than a Bad Credit History
Unscrupulous payday lenders used to target people with bad credit, and very often all this would do was make matters worse. The good news is that the lending space has been cleaned up by new rules. And lenders now have to focus as much on affordability as your credit history.
A person’s credit history is damaged when they fail to meet repayment obligations on a loan. Far better therefore to test a person’s ability to meet those obligations before lending them money in the first place. This is why all lenders (payday loan or otherwise) have to do affordability checks.
So, when it comes to repaying the loan can you do this without struggling to cover your other monthly outgoings? Lenders will ask you to list your regular household expenses (e.g. rent, food, energy, travel, etc) and compare these to your income. If you have sufficient money left over after covering your expenses then a loan may be affordable.
With the cost of short term loans now capped there is also less risk than there used to be. But keep in mind that you must repay these loans on time. No longer can you simply roll these loans on while trying to delay the repayment.
So, for those who don’t have the perfect credit score but who are still looking for access to a short term loan to help keep their finances in check, there is good news. Payday loans make it easy for many people to access the short term credit that they need even if they have a bad credit history.
Payday Loans with No Credit Check?
Well, not exactly. There’s no lender anywhere that would promise no credit checks when it comes to lending money. A historical credit problem may not deny you a loan, but being judged as not being able to afford it certainly will. So, if you need a small short term loan for a precise emergency purpose you can certainly apply for a payday loan with bad credit. The usual benefits of a payday loan apply, namely:
- Access to fast cash when you need it the most
- No restrictions on what the money can be spent on
- A no-hassle application process that can be completed online
- Repayment within a month, so no long term debts to worry about
If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.
Got a Question about Bad Credit Payday Loans?
Answers to Common Questions
No lender will guarantee that they will approve your payday loan application. It is critical that you can demonstrate to the lender that you can afford to repay the loan in line with the terms. You’ll know that in the period to 2015 that lenders were heavily criticised for making loans without regard to their repayment. There are now strict rules that require lenders to do proper affordability assessments. If a lender doesn’t feel you can afford the repayment then they will tell you.
Lenders will probably be prepared to assess the application of someone who is unemployed or on benefits but they will conduct a detailed affordability check. If they don’t believe it is financially sensible to lend then they will not.
Payday loans don’t require applicants to provide a guarantor. However, you will need to demonstrate you can afford to repay the loan even if your credit rating is not perfect.
All forms of credit will require the applicant to be credit checked. If for no other reason the lender will want to conduct identity checks to ensure fraud prevention. The applicant’s credit rating is less relevant to the lender. This is because the loan is for such a short period that what the lender really wants to be sure about is that the loan is affordable and that the loan will be paid off in full and on time.
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