Why Payday Loans Should Be Your First Choice?
Payday loans are those loans that are aimed at bad credit borrowers to help tide over during financial emergencies. There are various types of loans you can prefer when emergencies take you by surprise, but not all of them promise the fastest delivery.
But payday loans are those that come with the highest approval rate, which is why they are sought after. In other words, these loans are called 24 hour payday loans. As you fill in the application form, the lender quickly process your application to determine your repaying capacity and once the whole procedure is done, you get funds immediately in your bank account.
Most of the times, you get funds the same day. A loan is called a payday when it is paid back on your next payday, meaning the repayment length will be short, probably 14 days and you will be bound to settle the whole of your debt once and for all.
Why payday loans should be your first preference when emergency crops up
Here are the reasons why you should think of choosing a payday loan over any other small emergency loans:
The loans involve no credit check
One of the best features of these loans is that they do not run a credit check. When you apply for any other small loan like text loans or bad credit loans, you will have had inquiries on your credit report. These inquiries can be shown by other lenders and each inquiry pulls at least five credit points. This lowers your credit score and spoils your chance of borrowing money at an affordable interest rate.
However, when you take out a payday loan, your lender will not make any hard search footprints. As a result, your credit score remains safe. The lending decision is made based on your income. This is the prominent reason why these loans come with the fastest approval rate.
One-time payment
Payday loans are very small loans. On average the maximum lending amount is £700. However, a few lenders could be willing to lend up to £1,000. The repayment length of these loans is generally between two and four weeks. You do not have to take on the headache of managing your budget to fit into each monthly instalment.
They may help build your credit score
Payday loans are paid back in full, so they basically do not have a role to do up your credit score, but a couple of lenders are out there that allow you to repay these loans in fixed instalments. If the amount is so small, the instalments will be weekly.
On-time payment records will show your credit score to advantage. This will improve the chances of getting money at a lower interest rate down the track.
Make sure you take out a payday loan from a lender who reports timely payments to credit bureaus as no lender is bound to do so by the law.
No collateral or no guarantor needed
Despite a bad credit score, you do not have to put down collateral or arrange a guarantor with a good credit history. Since all such formalities are not part of the application process, you can get access to funds without further ado.
To wrap up
Payday loans should be your first choice as they are easy to access. You do not need to arrange a guarantor and collateral to get the nod for these loans. Most of the times, these loans are paid back in full, so you do not have to be tied to debt for a longer time. They may even help build your credit score if paid back in instalments.
Payday loans should be your first choice as they provide easy access and come with the fastest approval rate.
