Payday Loans

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Bad credit refers to failure of an individual in fulfilling his credit agreement in terms repayment in the past. An individual can have a bad credit report for various reasons like late payment of instalments of loans taken in the past or absolutely nonpayment of the same. Late Payment of electricity, phone, or other utility bills can also affect the credit scores on an individual. Any company or small firm sending your balance with them to collection agencies can have adverse impact on your credit score. A person who is bankrupt or faced a judgement against him from the County Court Judgement (CCJ) will have poor remarks in his credit report. M

People with bad credit report find it very difficult or more expensive to get any future loan borrowing. Any bank checks the credit report before approving loan applications filed by an individual. A bad credit report will make the bank think about his ability to repay the loan on time or even at all. Even if any bank approves the application there are high chances that the bank will impose high rate of interest knowing the fact that there is a higher risk. Bad credit scores not only affect future loan options of an individual but also have other negative aspects. For example, a person with bad credit score may be capped by various service providers such as telephone companies, internet service provider or may only be able to get pre-pay services. An individual with bad credit report may find it difficult to take rooms on rent as some landlords do go through the credit report before lending their property on rent. A person who has never availed any loan in the past need not necessarily have a good credit report because there will be minimum credit data or none at all on which to make a judgement. Again, such a person will go through lot of assessment by financial institutions before getting approval on his loan request. 

To overcome the difficulties of getting a loan with bad credit report people found an alternative and moved towards bad credit payday loans. Payday loan lenders do not necessarily look into the credit report in teh same way as mainstream lenders do. Thus, people in need of short term loans to cover sudden unexpected expenses like a medical emergency, repairing the car, a necessary trip etc. can approach payday lenders and get a bad credit payday loans. This DOES NOT MEAN that the loan is available to everyone regardless of their credit history, just that the lender may place emphasis on different things to the banks.

If you choose to take payday loans then before taking the loan it should be carefully judged by the you whether you would be in a position to repay the agreed amount on the agreed date. If there is any delay in payment then the loan term is extended and that also affects the credit report. There are various lenders of bad credit payday loans in the market and hence you should compare the interest rates and other terms among lenders and then choose the offer that best suits your purpose.

Payday loans have helped people who do not want to share their past financial hardships with friends and family. They want to take care of their financial problems on their own and avoid any shame caused by not being able to get credit due to a bad credit report. People belonging to this group prefer payday loan system as it provides a way for them to sort out their monetary issues independently. You need to remember that there has been justified criticism of payday loans as repeat use as such loans can cause harm and can result in long term trouble. It has also been observed that many payday loan borrowers are repeat borrowers. Before taking a payday loan make sure that all the terms and conditions have been thoroughly explained to you by the lender. These may include:

  1. The Annual Percentage Rate (APR) has been explained to you the lender.

  2. The lender needs to explain all other fees and charges associated with the loan.

  3. It is the responsibility of the payday loan firm to go through a background verification of yours to ascertain whether the loan is suitable for you.

  4. The lender has explained the method that will be applied in repayment.

  5. The time frame for repayment has been explained.

  6. The lender also needs to make it clear on how the repayment term will be extended if payment is not made by you on time and what additional charges will apply in that situation.

  7. The lender must explain the complaint procedure they have in place to look into any issues raised by you.

  8. The documents involved in the loans needs to be checked by you and then signed (either in ink or electronically onlune).


Thus we conclude that bad credit payday loans can be useful to certain extent provided the borrower can afford the loan and shows a recent history of actually repaying these. If there is repetition then it will affect the long term sutuation of a borrower as the borrower may get into deeper financial trouble caused by the high rate of interest involved in payday loans.