Payday loans are exactly what the term suggests. They are loans which have to be repaid on your payday. Usually, the tenure for these loans is very short ranging from 7 days to 30 days, but nowadays you can also get loans for the longest tenure. Traditional and high street money lenders and banks usually do not provide these loans and if you need them then the best idea is to approach a loan broker. Loan brokers have tie-ups with many specialist lenders who are ready to take extra risk and even provide special loans like unemployed loans, bad credit loans etc. This is the reason that more and more people are opting for specialist lenders and approaching them through loan brokers.
Loans for bad credit
Usually, traditional lending agencies and banks reject the loan applications of people with bad credit and as mentioned above they do not provide a payday loan to any borrower. However, you need not lose hope if you have bad credit because here loan brokers come to your rescue and help you to get payday loans for bad credit. The best part is that even though you have bad credit you will get a loan at a reasonable rate of interest. Usually, even specialist lenders charge a very high-interest rate if you approach them directly, but they have special deals with loan brokers due to which the rate of interest is affordable for most people
Why people take payday loan
Usually, people take a payday loan when they are faced with sudden financial emergencies. For instance, their car may be in need of immediate repairs which are not insured, emergency home repairs and even medical emergencies which are not insured. Nowadays most people’s income and lifestyles are such that they are not really able to save enough money to meet such emergency expenditure. This is the reason they require a financial helping hand which is available in the form of pay day loans. They can repay the loan on their next payday or even in monthly instalments.
Do you get loans without credit checks?
In the UK it is not possible to get no credit check payday loans because the Financial Control Authority has made it compulsory to conduct a credit check of the borrower before providing a loan to him or her. Hence when lenders and loan brokers advertise loans with no credit check they actually mean that they go soft on the checks. They do conduct a credit check as per the mandate of the FCA, but they consider factors other than the credit score while assessing an applicant for a loan. They take into consideration the current income of the loan applicant and compare it with the monthly expenditure. If they are convinced that they borrower can repay the loan within the stipulated tenure, they readily provide a loan to them. They do charge a higher rate of interest, but that is in turn for taking a higher risk and as mentioned above, if you apply for the loan through a loan broker then the interest rate will be reasonable and affordable.