Bad credit payday loans can provide a vital lifeline for emergencies where you need to access cash before payday comes around. Whether it’s a broken boiler, car trouble or any other emergency, bad credit payday loans can help to get you out of a tight spot.
What Is A Bad Credit Payday Loan?
Payday loans, whether for bad credit or not, are designed to be short-term solutions to alleviate financial stress. If you’re looking for loan options with longer repayment terms, you might want to consider exploring personal loans for bad credit as an alternative.
First, let’s look at what characteristics make payday loans, also known as emergency loans, more accessible for those with bad credit.
What Is A Payday Loan?
A payday loan is a short-term, often higher-interest loan designed to help with financial emergencies.
Payday loans are known for their quick approval process and simple accessibility. Thereby making them a suitable option for those facing unexpected expenses or sudden cash shortages.
What Is Bad Credit?
In the UK, “bad credit” refers to a financial situation where an individual has a less-than-favourable credit history. This is a description that can be used for just under 20% of the population. That’s 1 in 5 people in the UK thought to have credit that is described as “poor”.
It’s no wonder then, that there are plenty of options available to those who are considered to have “bad credit”.
Creditworthiness is most often assessed through a credit score. This is a representation of a person’s borrowing risk based on their credit history.
Bad credit lenders will more likely consider applicants who have CCJs, IVAs, missed payments and defaults. These can suggest a poor credit history.
Are Payday Loans and Short Term Loans The Same?
The terms “payday loan” and “short-term loan” are often used interchangeably but can have a few notable differences. When you take out a loan, it’s important that you completely understand the terms and are able to make timely repayments.
Payday Loans for Bad Credit
- Repayment – Payday loans may have a repayment date that aligns with the borrowers next payday. These terms are generally much shorter than standard loan repayment terms.
- Interest – The shorter repayment term and emergency nature of these loans often means they have a higher interest rate.
- Smaller borrowing amount – Bad credit payday loans are not designed for, nor are they advised to be, a long-term solution. For this reason many lenders will limit what can be borrowed, particularly in cases of poor credit.
Short-Term Loans for Bad Credit
- Repayment – Short-term loans can offer flexibility in the repayment term available. Although often this period is still short, some lenders will allow up to 60 months for repayment.
- Borrowing amount – Short-term loans make it possible to borrow more sizable amounts of money. In some cases borrowing of up to £25,000 is permitted.
- Access to funds – Whilst access to funds can be fairly quick, short-term loans require a slightly longer approval process than payday or emergency loans.
Is A Bad Credit Payday Loan Instant?
It is fairly quick to apply for bad credit payday loans. However, there are some exceptions that can make the term “instant” slightly misleading.
An application can take just 5 minutes, but bad credit can create a few complexities and require manual approval. Most lenders will look to release funds on the same day. However, there is no guarantee, particularly if applying later on in the day.
For a seamless process, use a broker, like Badger Loans, to help you instantly access a panel of 30 bad credit payday lenders. This helps to cut down on application time and avoid stressful delays and multiple rejections that can further impact credit.
What Are No Refusal Payday Loans?
“No refusal payday loans” claim to provide borrowers with guaranteed approval, regardless of their financial background or credit history.
However, it is essential to approach such promises with some caution, as legitimate lenders cannot promise universal approval.
Responsible lending practices involve assessing factors like income and creditworthiness to ensure that borrowers can repay loans without causing further financial strain.
For security, it’s advised that borrowers research payday lenders and use services like free payday loan brokers to ensure legitimacy where possible.
Can I Get A Payday Loan With Very Bad Credit?
It is possible to secure a payday loan with very bad credit, but just as with traditional loans, approval is not guaranteed.
Specialist Lenders
During the application process, try to take advantage of bad credit payday loan specialist lenders who will be more likely to approve your application.
Higher Interest Rates
Loans for individuals with very bad credit often come with higher interest rates. Lenders may view individuals with poor credit as higher risk, and the elevated interest rates help mitigate this risk.
Affordability
Responsible lenders conduct affordability assessments to ensure that borrowers can repay the loan without facing financial difficulties. While very bad credit may be considered, lenders still evaluate whether the borrower can afford the loan.
Work On Improving Your Credit Profile
Taking steps to improve your credit over time can increase your chances of obtaining more favourable loan terms in the future. Making timely payments on existing debts and addressing any negative items on your credit report can be excellent first steps for improving your credit score.
Can I Get A Bad Credit Payday Loan With A CCJ?
Yes, it is possible to get a bad credit payday loan with a CCJ (County Court Judgment), but obtaining approval may be more challenging.
How To Get A Loan When No One Will Approve You
Getting a loan when facing challenges with approval can be difficult, but there are steps you can take to improve your chances and broaden your options in the future.
In the meantime, there might be options available with specialist lenders. Apply in 5 minutes to access a board of 30 potential matches for you.
