Payday Loans - Fast Cash With Bad Credit
One popular option for bad credit finance is a payday loan. These are short term cash loans for samll amounts, usually in the range of £50-£800 or thereabouts.
They are specifically aimed at people who are short of cash towards the end of the month, and who need some money to see them through to their payday.
They usually work by giving your debit card details to the loan company before they give you the money, and then they'll automatically debit your bank account on your next payday to clear the debt.
This system means that it's very unlikely that you'll default on your loan, and so most people who are employed and have a debit card / bank account will be approved. In fact, most lenders don't even perform a credit check on applications, so even with very bad credit you'll probably be approved.
Are Payday Loans a Good Idea?
This kind of credit is very expensive, as a flat fee of usually around 25% of the loan amount will be charged. Combine this with the short loan term, and the quoted APR can seem huge. It's also very easy to get into a cycle of borrowing every month, as if you're using a payday loan to live beyond your means then it's very difficult to pay off your original loan as well as meet your living expenses. In fact, the government may be about to introduce new regulations making it harder to continually 'extend' your loan.
Nonetheless, a payday loan can be a lifesaver if you're suddenly faced with a big bill or other expense, and you simply haven't got the funds to meet it. Just be sure that you really need the loan, and have a good chance of repaying it the next month without getting into the vicious circle of renewing your loan every month.
Finding a Loan
Payday loans are very popular in the USA, but in the UK they're a fairly new arrival and so there's not as much choice. UK lenders include UK Payday, or see a list of payday loans / cash advance lenders.