Payday Loans are in the news daily at the moment, but most stories about payday loans seem to regurgitate the same old points. In an attempt to redress the balance here are 10 positive things you never know about payday loans.
1. Payday loans can be used to rebuild your credit score. If you have a less than perfect credit score the best way to rebuild your credit rating is to show you can use credit responsibly, the quickest 2 ways of doing this are payday loans and a credit card. Credit cards aren’t always easy to get if you have a few black marks but credit history has little bearing on a payday loan application, payday loan providers are more interested in your current circumstances and your ability to pay back the loan at the end of the month. Therefore payday loans can be far more accessible as well as being immediate. Pay it back at the end of the month as agreed and you’ve shown you can handle credit responsibly, do this a few times and you are on your way to rebuilding a healthy credit rating.
2.. Payday loans can provide instant access to cash in an emergency. Many payday loan providers offer a 1 hour turnaround, from receiving your application to getting the cash into your bank account, so when you need money and don’t have time to wait for long approval processes or 3 day money transfer and clearing processes, payday loans can get money, effectively, in your pocket the same day.
3.. You don’t need to go through a credit check to apply for a payday loan. Payday lenders are only interested in ‘can you pay back the loan when you get paid?’ Provided you can show that you can, what you have done in the past is of little importance.
4.. Payday loans give more people access to money and credit than any other form of borrowing. By not running credit checks or being ruled by applicants’ credit history payday loans provide money to many people who would be excluded by many high street lenders.
5.. Payday loans are not more expensive than other forms of borrowing. If you borrow £100 from a payday lender they will charge you £25, so at the end of the month you will pay back £125. That’s an interest rate of 25%. Many credit cards are 26% on purchases, they are much higher on cash advances, some are as high as 46% on cash advances. So if you borrowed £100 on your credit card and paid it back over a year you would pay £146, much more expensive. That’s not even taking into account any late fees if you missed a payment one month.
6.. There are no late fees with payday loans. You pay your loan and fee back when you get paid by direct debit, you can’t forget or be late so there are no penalties, ever.
7.. You can manage your account online so you can always see what you owe and when it’s got to be paid back.
8.. Payday Loans get more flexible with age. Once you have shown you can use the system responsibly you are given much more flexibility, so anytime you need money now and won’t have it till tomorrow or next week you can borrow quickly, pay the bill etc. and pay the loan back days later.
9.. There are no restrictions with Payday Loans. You can use a payday loan for anything you want, they are designed to be used in an emergency, but that can cover anything from a blown boiler to forgotten your mum’s birthday present.
10.. Payday loans are the best and quickest way for many people to get money into their bank accounts. The application and repayment processes are extremely straight forward, making it very easy to get money, pay your bill and pay the loan back shortly after when you get paid.
To read more about payday loans, check out our About Payday Loans page.