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Which payday loan is best for
people with bad credit?

Which payday loan is best for people with bad credit?

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The Best Time To Use Short Term Loans

If there’s one thing certain about life, that would be – things happen unexpectedly. No matter how ready you think you are, emergencies and sudden expenses pop out of nowhere, thus the need for short term loans. Think of a hardworking salesman whose car breaks down and in need of instant car repair. The service is available most of the time but the budget for it, well that’s another thing. Luckily, there are short term loans that could cover the fix and help the salesperson’s car back on the road again. Another instance is unemployment or a medical crisis. Such things are inevitable but can be somehow relieved with the help of a short-term loan. The loan could create a financial bridge for anyone who has little to no savings on their account or just has no extra cash to handle the situation.

Almost anyone is welcome to get short term loans, but basically, these are the people who are likely to apply for an advance:

–    Unemployed individuals who need cash to help them find a new job.

–    A working professional whose earnings are not enough to cover all the household expenses.

–    People on benefits who need extra money to purchase medicines or medical equipment.

–    Bad credit borrowers who are often rejected by banks and traditional lending facilities.

These are just some of the many borrowers who benefit from short term loans. The advance offers a small amount that is settled between three to twelve months, depending on the type of loan and the lender’s terms and conditions. A payday loan, for instance, is usually repaid once the next paycheck arrives.

why choose short term loans

Defining Short Term Loans

A short-term loan comes in many names and forms and is widely available, however, it is particularly offered to borrowers who are likely to settle the loan back. It is designed to meet the consumer’s particular need, unlike a mortgage which is specifically used to buy a property. As long as the loan seeker has a regular source of income and can repay the loan without any hassle, he can enjoy the credit on almost anything such as to pay minor debts, settle utility bills, or even as an extra cash for travel. Even unemployed individuals who have other sources of funds or bad credit borrowers can have a personal loan.

However, despite its flexibility, the interest rate and fees can be prohibitive for the advance. Short term loans are just too expensive compared to regular loans. After all, it is convenient and can be acquired in an instant. Also, it doesn’t involve credit checking most of the time, which is risky on the lender’s behalf. Therefore, to compensate for the risks, loan providers have applied exorbitant rates to discourage anyone who cannot give the loan back.

Nevertheless, the fees applied to depend on the type of short term loans you acquire. For instance, a payday loan is more expensive than a short-term personal loan. Also, it’s a lot more difficult to settle since you need to provide the payment in one lump sum on the next payday. This means giving the principal amount plus the interest rate and fees in the next two weeks. Because of this, it’s advised to maintain the settlements to avoid penalties for late payments. In addition, it is best to make a research first about different lenders since not every short-term loan is created equal. Some advances are just too expensive that it can break your finances more than it can help.

But then again, there’s no need to wait for a couple of days or weeks; with short term loans, you can have the fund you need in as fast as one day or even 30 minutes. It’s also important to note that there is no collateral required, thus there’s no need to put your asset at risk.

Instances Short Term Loans Are Beneficial

Considering the high interest rate and fees plus the short-term repayment period, it’s important to know that short term loans should not be used all the time. In fact, it should be considered only as a last resort when you can’t find other options or you really need instant cash. Using a credit card or a home equity is more ideal than taking a loan in some instances. However, there are times when short term loans are more valuable than its high price tag.

Avoiding Default

A default is likely to happen to any borrowers mainly because of unexpected instances, such as unemployment. It is ideal to not take out another credit when you’re approaching default as this may only lead to a cycle of debt and not to mention, a hefty interest rate. But, if you feel like you have no other options and you can’t find another source of fund to cover your debts, a short-term loan is not a bad idea since the fees are cheaper compared to the fees applied for late or missed payments. To ensure that you will not suffer from a high interest, it’s best to acquire an advance from your bank or other traditional lenders though.

Creating Or Fixing Credit

Short term loans are not secured on any collateral, thus it is considered as a high risk. And, whenever an advance is a high risk, it comes with a greater effect on your credit remark. That being said, it can be very damaging on your credit report if you choose to default on the loan. Meanwhile, compensating for a high-risk loan gives a quick boost on your credit rating, thus a good idea when you’re just starting to build a credit history or you’re aiming to fix a damaged credit report.

Life And Death Situation

When an emergency arrives, the last thing you want is to delay the solution. For instance, the breadwinner of the family comes down with a life-threatening disease and there’s no time to look for another source of income to resolve the medical bills. Short term loans come in beneficial because they are readily available anytime. Waiting for a long time is not an option since you can have it on the same day you’ve applied.

why choose short term loans

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See How Others on the Market Compare

Loan amount
£100 - £750
Loan term
1 - 35 Days
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Loan amount
£100 - £2,000
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3 Months Only
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Struggling Employees

Employees are the drivers of the global economy. They comprise a large percentage of the workforce, and the world will stop without them. If you’re going to analyze deeply, you’ll realize that all of us are employees. We are working for someone else – be it a boss, an organization, or a contractor. Employees are good demographic points because they tend to experience financial troubles more often. It could be that employees are also parents, or they need quick cash to survive until the next payday. In fact, the borrowing habits of employees empowered payday loans (that’s why they called ‘payday’). Employee-centric payday loans don’t have much difference from the cash advance programs of the past, though some lenders have made adjustments. Employee payday loans probably have a smaller interest rate stretched over a manageable repayment period. Lenders can also work hand in hand with employers to increase awareness for employees.

Freelancers on A Budget

The global freelancing community is starting to gain important traction this 2017. In fact, thousands of people are now resorting to freelancing because of the awaiting opportunities in the market. Freelancers are like hunters – they’re actively chasing big game, occasionally hitting and, oftentimes, failing. New payday lenders have understood the need for freelancer-specific loans, though only a few of them are following suit. Perhaps freelancing still needs to be recognized as a tangible income source in the payday lending arena. Another angle is the way people are tagging themselves as ‘freelancers’ even though they don’t have any jobs or income sources. This is why some lenders will look for additional income proofs whenever they encounter freelancers applying for payday loans. Nevertheless, we’re going to see lots of payday loans geared towards freelancers on a budget this year.

Startup Entrepreneurs

Being an entrepreneur today is no longer a side path – it’s necessary for the betterment of your life someday. Once you have a winning idea and transformed it into a plan, you can focus on acquiring capital. If your startup business is not that big, you can settle for a payday loan. Payday lenders can release your money in just minutes. They won’t care about your credit rating or the nature of your business (somehow). What they want to know is if you’re capable of repaying the loan within the agreed time frame. Once you got your payday loan, your business operation can be ignited and you’ll start raking profits in no time. Just remember to allow some of those profits towards your loan repayment. An unpaid payday loan can bring too much stress.

Investors

You may think that big-time investors are going after large, bank-issued loans. Well, you’re right. A stock investor, for example, needs big loans if he wants to participate in a growing market. The same can be said for antique collectors and coin enthusiasts. However, we can’t deny the fact that investors also start small. In this sense, small-time investors can use payday loans to fund their investments. Whether they make a killing or not, investors can see potential attention from new payday lending companies.

Once you understand all of these demographic points, you’ll know how lenders are adjusting their operations strategically. At one point, they may pursue better marketing efforts while compromising other areas. Despite this, it’s still important to find a lender that attains a great form of balance among all of these demographic areas.

5 most recent personal loan reviews

Review of H&T Finance

So friendly and so easy to be accepted. I needed a loan to help out a family member and I've been able to do so, so quickly. Daniel at H&T was so polite and helped me understand everything thoroughly.

Review posted by Aimee Walls, Carlisle

  • Customer Service
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  • Value For Money

Review of Post Office Money

Post Office, thank you so much! I will definitely be recommending you for your helpful and professional support, from receiving my completed application you were very quick in processing my application. I applied in one day and by the second had my loan. You gave clarity when needed and made me feel that I was not just a number. Thanks again.

Review posted by Lisa Davies, Sunderland

  • Customer Service
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  • Ease Of Use
  • Value For Money

Review of Street UK

My experience with this great team has been superb, I've had five star quality service since day one and my application processed rapidly, there is no messing about and they provide real fast and strong customer service which I am happy about, I know where to come next time, thanks for all your help.

Review posted by Joe Irving, Leeds

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money
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