Instant payday loans and bad credit

Posted on January 5, 2012 by

Instant payday loans or indeed borrowing of any kind, combined with bad credit, may not be something that you immediately associate as going together.

In fact, while you may be right when considering traditional lending in conjunction with bad credit, with instant payday loans the position may be completely different. That’s because of the very nature of the different types of lending involved.

Traditional lending

Traditional loans may typically be for fairly large sums of money borrowed over a period of time that may typically stretch over a number of years. The amount is repaid in monthly instalments, which includes the interest payable.

You would typically take out a traditional loan for things like the purchase of a new car, home improvements etc. Traditional lending tends to represent a long-term commitment to keep up prepayments, which in the case of mortgages, could stretch ahead into the future for 25 years or more.

Instant cash loans

On the other hand, fast cash payday advances are typically for relatively modest sums of perhaps between £100-£250. The amount is repaid in one instalment, which includes interest and any charges that are typically outlined during the application process.

Cash advances can be used for anything you wish, from settling that unexpected bill to treating the family to a special treat – just because it seems like a good idea. Many of the things you could use a payday loan for may appear to be trivial or even frivolous to a traditional lender.

The cash advance amount is typically borrowed for a period of some weeks or even several days – typically until you next get paid. It is all over and done with relatively quickly.

Levels of risk

Because payday loans are paid back quickly, they may be considered as lower risk by many lenders.
They may feel that only a fast credit check, rather than an in-depth one, is all that is required. This may mean that your application for a payday loan may be accepted even if you have had credit issues in the past.

Instant payday loans may be available to you if you are in a regular job, over 18 and a UK resident. You may wish to bear in mind though, that lenders may always reserve the right to decline applications where they perceive the risk to be too great.

Comments (1)

 

  1. Bad Credit Payday Loans: The Finest Mode of Getting Fund « Bad Credit Mag says:
    January 13, 2012 at 3:14 pm

    [...] Because payday loans are paid back quickly, they may be considered as lower risk by many lenders. They may feel that only a fast credit check, rather than an in-depth one, is all that is required. This may mean that your application for a payday loan may be accepted even if you have had credit issues in the past.Source: yourpersonalfinance101.com [...]