What Are The Disadvantages Of A Payday Loan For Bad Credit?

How CashLady Can Help

At CashLady we have a dedicated panel of FCA approved short-term credit providers. Many of our lenders may be able to lend you funds in an emergency, even if you have a poor credit history.

Applying for a loan with , even if you have bad credit, is completely free of charge. We will never charge you a fee for using our service.

When you submit a credit application to CashLady it means your details will be seen by our panel of trusted lenders. As a borrower, this can mean more credit options and importantly, a higher chance of your loan application being approved.

Please be aware that not everybody who applies for a loan with bad credit in the UK will be accepted.

As with any type of personal loan, responsible borrowing is important. You must be able to repay your loan commitments in full and on time. Doing so will help you avoid building up a cycle of debt, sometimes referred to as a spiral of debt or a debt trap.

Advantages Of Bad Credit Payday Loans

  • Payday loans for bad credit are often available when you cannot get help elsewhere. It could be the difference between losing the use of your car or being able pay for those emergency repairs.
  • The application process is relatively simple and non-intrusive.
  • Payday loans are unsecured loans. This means if you do miss a payment you won’t risk losing a valuable possession (although there could be other financial consequences).
  • Applications can be completed online for speed and efficiency.
  • With some personal loans, you are tied into repayments for months (and even years). With a bad credit payday loan, your commitment could be over in a matter of weeks.
  • Payday loans are for relatively small amounts of money. This keeps the cost of borrowing to a minimum.
  • Payday loans are often available to consumers that might have applications rejected elsewhere. This can make a loan tempting in non-emergency situations. It would be wrong to treat them as a handy alternative to a traditional long-term loan.
  • Payday loans usually have a high APR – much higher than other types of personal finance. There are now restrictions and price caps in place to protect consumers, but it is always wise to be aware of exactly how much you’ll be paying in total.
  • The definition of a ‘payday loan’ states that it should be there to bridge the gap between your next pay cheque. As a result, you won’t have long payday loans Mount Pleasant payday loans direct lender to pay back what you owe – which can sometimes create a problem.

Will Applying For A Bad Credit Loan Affect My Credit Rating?

Applications for loans, whether they are accepted or rejected, will normally require a formal credit search before approval. Doing so will leave a footprint on your credit file. If you already have an adverse credit history, further credit searches could make your situation even worse. Multiple footprints on a credit file can indicate to lenders that you are unable to manage your finances effectively.

Making multiple loan applications in quick succession can damage your credit file. It is recommended that you do not continually apply for loans in succession if you are repeatedly declined.

This is because the next lender will be able to see your most recent application and successive loan applications may give a negative impression.

Alternatives To Bad Credit Payday Loans

If you are looking for alternative options for bad credit payday finance, our suggestions include guarantor loans, peer to peer loans, credit cards for bad credit and credit unions. Eligibility depends on your credit score.