What are Payday Loans?
There are lots of people that are still not really familiar with what payday loans are. We have lots of different loans available to us and it can be confusing knowing what the main differences are between them. This is something which is important though because we need to think about this when we need a loan. It is really important to make sure that we pick the very best loan for the us, when we are choosing between them. This is because it can make a big difference in how much we pay for the loan and whether it provides us with good value for money. We can check when we apply, but often we are in a hurry and so it is a good idea to have a good understanding of the different loans and how they work so that it is easier for us to make the decision when we need to.
Main Features of a Payday Loan
It is wise to know what the main features of a payday loan are which make it different to other loans and then you will be able to choose whether you think it will suit your needs. There are a few things which stand out. The first is that a payday lender does not consider your credit score when they are deciding whether to lend you money or not. The lender will do a credit check, but they will not mind if you have a poor credit record. The loans were actually set up to specifically help people who have a poor credit record and therefore they are ideal for anyone in this situation. The loans were also designed to be for emergencies. This means that they are usually arranged very quickly so you can get the money fast. With some lenders this can be done within a few hours but other may take longer and you will need to check this out to see for yourself. It is also worth noting that there will be some lenders that will work outside of normal banking hours and you will be able to borrow money form them evenings and weekends, which could be handy. Lastly, you need to be aware that you will be lent smaller amounts of money usually between £100 and £1,000. You will find that this means that the loan will be easier to repay as you have borrowed less but if you need massive amounts of money they will not be suitable for you. The money will need to be repaid in a lump sum on the day that you are paid which means that you will need to be confident that you will be able to manage this amount.
When to Use it
So therefore a payday loan is not really for general use. However, if you need to borrow relatively small amount of money in an emergency then they can be handy particularly if you have a poor credit record and cannot get money elsewhere. They can also be handy if you need money outside of normal banking hours or want a loan that you can repay really quickly, so that you are not in debt for very long. With all loans though, it is important to make sure that borrowing is the right option for you and you should check to make sure that this particular type of loan will suit you the best. Then you will need to also compare the different lenders offering this type of loan to make sure that you are using the one that is offering you the best value for money.