The payday loan is instant borrowing popular option for the salaried borrowers. As per trade standards, the minimum loan amount is £50 and the maximum loan amount is £1,000. However, many direct lenders offer a higher amount of payday loan also facilitating for instalment repayment. The creditable amount is decided on the basis of income proof and other factors. Although it is the most sought after lending facility; still, the high cost has always been the matter of discussion among the salaried community in the UK because the cost may be even more than 1000% APR.
The payday loans for bad credit borrowers by direct lenders get approval within minutes; therefore, these rank at the top among the popular instant decision same day borrowing options. In most of the cases, the borrower gets the money credited in a bank account by the next working day.
These easy cash loans are widely available and socially accepted despite being the short-term financial help at a high-interest rate; therefore, you must understand the pros and cons before planning and applying for salary day loans.
Pros of Payday Loan
- No collateral required even for bad credit score holders
- No credit check payday loan is also available
- Perfect fit for a short-term financial problem
- Legal borrowing facility
- Terms and conditions including the possible penalties are
- capped by the authority
- Transparent terms and conditions
- Free from the upfront & funds transfer fee
- Direct funds transfer to salary account
- Short-term repayment responsibility
- May improve the credit score if managed properly
Cons of Payday Loan
- High cost
- High possibility of falling into a vicious cycle – one loan may drive for another
- Short repayment term
- Low loan amount
- The due amount gets
automatic deduction from salary account irrespective to currently available finance and responsibilities - Less flexible for stretching to longer repayment; also not good to hold for long
How your Credit Score Affects The Cost Of Payday Loan
While exploring the online direct loan stores in the UK to get affordable salary loan, you come across numbers of lenders offering the required financial help at a different rate. The standard repayment period of wage day loan is 28 days or until the next payday. The salary cheque is taken as the security against the credited amount; so, you hardly need the do complex documentation but your credibility matters as in other lending formats. The lenders check your credit score essentially. The top three credit rating agencies in the UK are Equifax, Experian
How to Repair Credit Score with Payday Loan:
When you pay the cost of borrowing, you must also think to
When you pay the cost of borrowing, you must also think to
Concluding Note
The financial problems signal you in advance. If you are uncomfortable in debt repayment, tackle the problem ahead of time. The reputed payday loans for bad credit from direct lenders are always ready to retain their clients; therefore, you always get the advantage of flexibility in repayment but don’t take it as a cost-free obligation.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.