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.
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.
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.