Credit is the power as long as we control its amount, interest rate and duration. However, when your monthly debt instalments begin to challenge your financial planning or dampen the household saving pot, it is worrisome and needs particular attention.
With inevitable cash crunch, there is no room for additional expenses. Be it a medical emergency or personal necessity it becomes testing to avail loans and financial aids. But many times, not catering to your money needs could be the biggest financial blunder for you as constant cash shortages have potential to worsen your credit situation to the deplorable stage.
Whether it comes to apply for an emergency same day loans such as payday loans or unsecured personal loans in the UK, you need to step ahead on time. The biggest hassle of taking a timely decision to borrow is the myths associated with bad credit loans. Let’s explore the related facts and myths and eliminate fears and doubts about online payday loans.
Why opt for online private financial companies instead of traditional sources?
Your credit score plays a vital role in determining your loan eligibility. With a bad credit score, traditional banks and finance companies shy away from extending loans as they only want to deal with high worth customers.
However, many online finance companies cater specifically to the needs of people seeking bad credit loans. Being risky loans, they charge higher credit score. So, you should keep your expectations right when you seek bad credit loans.
Payday loans as emergency funds
A payday loan is essentially an emergency loan and available online as one of the fastest loans in the UK. These are small short-term loans which are borrowed till your next salary date. Typically, you can borrow up to £1000 as a payday loan. Currently, FCA has put a cap of the maximum £24 interest rate on £100 loan in a month.
Why opt for payday loans?
- Emergency funding:
When you need instant unplanned loans, payday loans come as true saviours. You can get a loan within the first hour of applying, depending on your requirements and lender’s terms. You can pool with a broker to search for the appropriate payday loan at the lowest possible rate.
2. No Hassle loans
Payday loans are swifter and more hassle-free as compared to instalment loans. Herein it is important to ensure that you follow a transparent procedure to avail a payday loan. Beware of loan sharks promoting fake promises such as no credit check payday loans. For these loans usually, have high charges which could be a financial suicide in case of non-payment.
3. Your bad credit history doesn’t disqualify your loan application for a payday loan.
Why not opt for payday loans?
- Expensive funding
- The rate of interest is high for payday loans. You should wary about this very feature before applying for payday loans.
- You need to ensure the timely repayment of payday loans as rolling over can almost double the loan charges. This would also affect your credit rating adversely.
- Don’t use payday loans as a means to pay out your bad debts.
- Being expensive loans, these are not ideal for requirements of more than a month. The Bottom line
- When it comes to restoring your bad credit situation, no solution is ideal for all. Depending on your condition you should take the decision. It is wise to use professional advice and make an informed financial move.