There are some important things that you will need to remember before filling out an application for a payday loan. The more you find out about these loans, the easier it will be to decide whether or not this is the right borrowing option for you. Millions of people throughout the UK get payday loans each year, but it’s not the kind of thing you want to reach into. You will definitely be glad you took the time to get this information before moving forward.

Payday Loans are Short Term

You will be required to pay back the loan you take out within a couple of weeks, though some lenders offer longer payback periods. There are 12 month payday loans, but they are typically only a couple of weeks. You use your next paycheck to cover the full balance of the loan. The fact that these loans are so short term can be a good thing, as it makes them fairly easy to pay back. If you don’t think you will be able to pay back the loan, it’s better not to get it in the first place.

You can still get a Payday Loan with Bad Credit

A lot of people who have bad credit never even apply for a payday loan because they don’t think they will be able to get one. It’s important that you at least submit an application, because there is a good chance that you’ll still be approved. The private lenders who give out these loans tend not to focus so much on the applicant’s credit like banks do. This means that you can still get the loan you need even if your credit score is less than stellar. The lender might run a credit check on you, but that doesn’t mean your application will be denied.

Interest Rates

You will need to keep in mind that interest rates on payday loans are higher than normal, around 300-400%. The exact interest rate that you get will depend on a number of factors, ranging from the state of your credit to the lender you choose. If you want to get the best possible deal on one of these loans, it is highly recommended that you take the time to find a lender who is reputable and will be able to give you a good deal.

There are many different Private Lenders

When you consider all of the different private lenders that give out same day loans, it is crucial that you look for the right one to give you your loan. The lender you select will set your interest rate and the overall terms of the loan, so you will want to take your time. Not all of these lenders are reputable, so it will be necessary for you to look for one that you can really trust. A good lender means getting a solid deal on your loan. The more research you do into these lenders, the better your chances are of getting the money you need without having to worry about getting ripped off in some way.

How Payday Loans Affect Your Credit

Payday loans do not negatively affect your credit rating unless you are not able to pay yours back on time. Simply applying for one of these loans won’t necessarily mean a strike against your credit, because the applications are considered a “soft inquiry”. You will want to ask each lender you are interested in whether or not your credit will be impacted by simply submitting an application. When you get this information you will be able to prevent your credit rating from sinking even lower than it already is.

How You Use Your Payday Loan

The way you use the money you get from a payday loan will be incredibly important. You will want to make a point of only applying for one of these loans if you really need the money. Too many people get a payday loan just because they want to go shopping for things they don’t really need. The best use of one of these loans is an emergency expense of some kind, such as a car or home repair.

Final Thoughts

Payday loans can be incredibly beneficial, but you will need to really think and do research before applying for one. Those who rush into getting these loans almost always end up regretting it later on. These loans have become very popular in the UK because of how quickly they allow people with bad credit to get the money they need, but there are numerous aspects to keep in mind. As long as you take the time to get this information, you shouldn’t have any problems whatsoever when it comes to getting or using your payday loan.