Are Payday Loans Suitable for those with a Poor Credit Record?

If you have a poor credit record then you might think that that there are no loans available to you and that you should not borrow money. Borrowing is always a decision that should not be taken lightly but you may find that it could be a possible option for you. If you have an emergency, for example, then you could look and see whether there might be some lenders that will be able to help you out.

Can I borrow the money?

If you are looking at borrowing but you know that you will be turned down for most loans because you have a poor credit rating then you may lose hope. However, you will find that you will have a good chance of being able to get a payday loan. These were actually set up to help people who have a poor credit record and find it hard to borrow money elsewhere. There are no credit checks with a payday loan and this means that even if you have a poor credit record you will still be able to get the loan. There are just a few criteria that you will need to fill in order to qualify. You will need to be over 18, be a UK resident, have a regular income and have a bank account. There will be very few people that will not be able to fulfil these criteria and therefore most people would be eligible for the loan. You could always contact a lender and speak to them about it to find out for sure.

Is it wise to borrow the money?

Even though you are very likely to be able to borrow the money, it is worth thinking about whether you should borrow it. If you already have a poor credit record it could be because you have had financial problems in the past. Of course, it could be because you have not borrowed before or have very few financial commitments so there is no data to asses you on. However, it should still be something that you think hard about.

  • Do I really need it? – payday loans are designed to help out in an emergency. It is worth thinking hard about whether you really need the money. Consider why you are thinking of getting the loan and whether it is for a purpose that is really necessary. Consider whether there are any other options that you could use and which will be the best for you.
  • Can I afford to repay it? – it is really important with any loan, to make sure that you are confident that you will be able to repay it. As the repayment day for a payday loan is always the day that you are paid, it is easy to assume that means that you will be able to afford it. However, it is wise to have a look at what other payments will go out that day and whether you will have enough money left the repay the loan. Make sure that you look back at old statements to examine the figures so you can be confident that you are making the right decision.
  • Will I manage afterwards? – it is also wise to make sure that you think about the rest of the month. Once you have repaid the lump sum of money on the day that you have been paid, you will have to manage all of the rest of your expenses with a lot less money than you normally would. Consider whether you will be able to manage this. It might be that you will have to cut back your spending significantly and if this is the case then setting yourself a budget could be really useful. It might be that you will have to earn more and so researching what you might be able to do in order to achieve this could be useful. You need to be confident that you will be able to cope before you take on the loan.

So, although it is very likely that you will be able to take out a payday loan even with a poor credit record, you need to be completely sure that it is the right options for you. Look at how much it will cost you and whether you will be able to afford it. Consider whether you really need it and look around to see if there are other options. It is worth putting in this work as it could make a significant difference. If you do decide to go ahead, then make sure that you compare different lenders so that you are sure that you are using the one that is best for you. Compare how much they cost, but also find out about them and think about which you think will be the most suitable for you.