If you’ve been considering taking out further borrowing, there are many products available to help that are available online. Depending on the precise needs for the loan, you can find a specific product that matches from an online or specialist lender. One type of loan you may have heard of is payday loans that in the past have received a bad reputation, however, this form of borrowing does have its benefits. Here we look at some of the main reasons for a payday loan to be considered as a valid short-term option.
Quick & Convenient Application
If you need funds in a hurry, one of the quickest ways to do so is to apply for payday loans. Thanks to an overall quick application process, your finances can be assessed fast once your application is submitted along with a full credit check. This means within minutes you can fill in an application and have a lending decision. Thanks to Fintech advancements in the last decade, the whole process of applying can be fully automated without the need for long delays at each stage. This is good news for applicants who need a quick decision.
Low Credit Ratings Considered
If you are someone with a poor credit rating or have been declined recently by other lenders, many payday loan lenders are in a position to help. This by all means doesn’t mean those with bad credit are guaranteed an ‘approved’ decision but instead allows applicants to prove their affordability first, rather than be turned away at the first hurdle. Many payday lenders are happy to take the time to assess your finances, so if you have the proven affordability to make the repayments for the loan amount you are looking for, you could be successful.
Payday loan lenders have come a long way in the last few years thanks to rules and regulations brought in by the Financial Conduct Authority (FCA) to stop the poor lending practices that some lenders were known for. Now, many short-term lenders of payday loans are FCA approved and follow closely responsible lending guidelines. This means you will see transparent terms for the interest and amount you will need to pay and a thorough checking of your financial history to ensure you can afford further borrowing without getting into difficulties. If you are unsure if a lender is FCA approved, you can check on their online registration.
Same Day Cash Pay Out
As they are quick and convenient to apply for, applicants who need quick cash can benefit from same-day cash into their bank accounts. Ideal especially in an emergency such as an unexpected repair bill, being able to receive the cash within minutes of being approved can help resolve a situation swiftly. For those who do not have the option of existing savings or either family or friends to help, this is where a payday loan can make a difference if used in an emergency.
Fitting repayments into your schedule can be a challenge with some lenders, but with payday loans, you have added flexibility. As they are for short-term use, many will limit repayments to no longer than 12 months whilst providing the option of weekly or monthly repayments. Rather than the lender advising the schedule, applicants can adjust this to make the repayments as affordable as they need to be whilst paying the loan off as quickly as possible.
When considering payday loans, there are many benefits to choosing them. However, you should always ensure you are using them for short term purposes only and that they are not being used to cover any long-term financial difficulty. For further advice, please see The Money Advice Service or Citizens Advice.