Can Anyone have a Payday Loan?

You may feel that payday loans are only designed for certain types of people. It is commonly felt that the loans are only for those that have a poor credit record or that need money really quickly. Although this is true and the loans are suitable for these people, they are also for others as well. It is worth understanding a bit about how they are set up so that you can decide whether the loan will be the right sort for you. You may be surprised that it  will suit you better than you thought.

Poor credit record

If you have a poor credit record then you could find it difficult to borrow money. This is because many lenders will be wary to take you on. They will be concerned that you will not be able to repay their loan and therefore will not be prepared to lend you anything. If your record is okay, then they may agree to lend to you but at a very high rate of interest, higher than that advertised or that they offer to most other customers. This is why many people with a poor credit record will choose a payday loan as an option for themselves. They know that as no credit check is done, there will be no quibbling about whether they can have the loan or not.

Need money fast

A payday loan can be organised very quickly. With some lenders it is possible to get the money that you need within a few hours of applying. This is very much quicker than many other types of loan. You will need to check how long the lender you are considering will take as they can vary. Some may take a few days. This can still be a lot quicker than other loans which can take a considerable amount of time to organise. If you already have an arrangement for a credit card or overdraft then this can be quicker but otherwise most other loans will take longer than a payday loan. Therefore, most people that need money really quickly will consider taking out a payday loan.

Repay quickly

A payday loan has to be repaid on your next pay day. This means that you will only have the loan for a few weeks and then you will need to repay it. This can be a big advantage to anyone that is not keen on borrowing money for very long. Some people get concerned about having a loan and the fact that they owe money and so knowing that they will not have a loan for very long will make them feel much more positive about it. They will also not need to feel worried every month about finding the repayment as it will all be over with in one lump sum.

Cannot borrow too much

With a payday loan you can only borrow a relatively small amount of money. This means that you are not able to get into a great deal of debt. It can feel a lot better knowing that you will only owe hundreds of pounds rather than thousands. With some loan types you have to borrow a very large minimum amount; perhaps much more than you actually need. This means that you will have to pay it back over a longer period and pay interest on it for longer because you owe more and this will mean the loan will last longer and be unnecessarily expensive. The longer you owe money; the more you will pay in interest. You will also have a debt hanging over you for longer which may not be very nice for many people.

Conclusion

Due to the fact that a payday loan has some unique features, it means that it can suit certain types of people. However, there are many features which may mean that it could suit lots of different people. It is important not to think about what specific sorts of people you think might be targeted but think about what features the loans have and whether these are something that will suit you and your needs. You may need something quick, where you will not have the loan for long, that only lends a small amount or that does no credit check. It could be one or a combination of these features that appeals to you or you may find that there is something else about a payday loan that makes it the perfect option for you. So, take a look at how the loan works and think about what you are looking for in a loan. You may find that a payday loans fits in with your requirements really well. Of course, you should also compare different lenders as they may have slightly different features and so some specific payday loans might suit you better than others.

What Can Payday Loans be used for?

If you are considering whether to get a payday loan then you may wonder what the loans can be used for. It might be that you are not too familiar with this type of loan and this is why you are not sure whether it will be right for the purpose that you need money for. It is good to learn more about it so that you can decide whether it is right for you.

Specific Uses for Loans

There are some types of loan which are designed for specific purposes. These include mortgages, student loan and car loans. However, there are also loans which can be used for all sorts of purposes such as credit cards and personal loans. A payday loan will fit into this category. The lender will not insist that the loan is used for a specific thing and so it will be up to you what you spend it on. This means that you have total flexibility with regards to what you purchase with the money that you have borrowed. However, it is worth having an understanding of some of the main features of payday loans so that you know whether they will suit your needs.

Payday Loans

There are several features of payday loans which might have an impact on whether it is the right sort of loan for the use that you have in mind. Firstly, you need to be aware of the amount of money that you are able to borrow. A payday lender will normally lend up to a thousand pounds. This means that if you need more money than this then you will need to look at different types of loans. You should also be aware that first time borrowers may not be able to borrow as much as previous customers. This means that you may only be able to borrow a few hundred pounds. However, this may not be the case with all lenders, but you will have to do some investigating in order to find out.

Payday loans are repaid very quickly. This suits a lot of people because it means that they do not have a loan outstanding for very long. Some people do not like borrowing money and so being able to repay quickly really appeals to them. However, it does mean that you will need to repay everything is owed in one lump sum payment. This might be something that some borrowers would prefer not to do. For some, they prefer to repay over a longer time period so that they can more easily manage the repayments. It is therefore wise to find out exactly how much you will need to repay and when you need to repay it and this will allow you to calculate whether you will be able to manage this. You will find that the repayment is due on the day that you are paid which should mean that there will be the money available to repay the loan. However, if you have an overdraft which will be paid off first or other bills due to be paid that day then there is a risk that you will not have the money available. This will mean that you will miss the repayment and will be subject to extra charges. Obviously, you will want to avoid these if you can and therefore it can be wise to do a lot of calculations to make sure that you will have enough money available to pay for it. Consider whether there will also be enough left to cover all of your costs for the rest of the month as well because you will have to wait for your next pay day before you have any more money coming in. You may need to cut back on your spending in other areas in order to make sure that you manage.

Conclusion

So, as you can see this sort of loan is great as a short-term lending solution which can be used to purchase anything that you wish. There is a limitation though, on the amount of money that you can borrow. Therefore, you will need to check that it will give you enough money before you apply. The money has to be repaid very quickly, usually within a few weeks and therefore you will need to be able to make a lump sum payment pretty quickly. As repayment happens on your payday then you should have the money available to make it. However, you will need to make sure that you are left with enough money to be able to manage for the rest of the month, considering the other costs that you will have. You will also need to think about how much money you need to borrow and whether the loan will be enough to cover the cost of the item that you need to buy.