When you’re in desperate need of cash and you have a bad credit score, panic can set in as you start to wonder how on earth you’re going to pay important bills or afford to pay the deposit on your summer trip. Thankfully, just because you have poor credit doesn’t mean that you won’t be able to get any loans at all.
What is a payday loan?
A payday loan is a short-term cash advance that you can take out if you can’t wait until your next payday for money. You can normally apply online for these loans and find out almost immediately if you’ve been approved or not (even if you have bad credit).
What if I have bad credit?
While there is no guaranteed of no credit check whatsoever when you apply for a payday loan, lenders tend to be more lenient than the banks and other traditional lenders, so it’s easily to get hold of a payday loan even if your credit is poor. Even if you do have bad credit, it doesn’t mean that you’ll be excluded from ever taking out a payday loan. The lender might do a credit check just to look at your credit history and have a record of it just in case.
Do all payday loans check credit?
A lot of lenders will carry out a small credit check on your financial history, but even if your score is very bad, you might still be able to get a loan. Having especially bad credit might mean that you miss out on borrowing the largest amount possible, but you could still get your hands on some quick cash.
When payday lenders check credit, they often do so using checks outside of the traditional credit bureaus, for example, TransUnion. These are the bureaus which banks use to check your credit, and some lenders won’t use any of these methods, so there will be no record that you have had your credit checked through one of these.
What can I use a payday loan for?
You can use a payday loan for anything you like. Whereas at the bank, you’ll be asked what you’re borrowing money for, particularly if you have bad credit, payday lenders aren’t interested in what you’re spending the cash on. They’re only interested in making sure that you repay them the money by the date on which it is due.
Will late repayment affect my credit?
Unfortunately, if you don’t pay back all of the loan by the due date which is set out in your loan agreement, you may incur charges and extra fees. It is also likely that your credit score will decrease as a result of failure to make the repayment.
If your loan agreement specifies that you must repay the money in full by the date it is due, you cannot get away with paying a fraction of it and hoping that your credit score will not decrease. While it’s not guaranteed that your credit score would even be affected, it is very likely that it will get worse, just as it would if you did not repay any other type of loan.
How can I get a loan without any credit check?
Most payday lenders cannot promise that there will be no credit check in the application process, but some might offer these ‘no credit check’ loans on the condition that you pay a much higher level of interest on the money you borrow. If you are adamant that you don’t want a credit check carried out on your financial history, you are likely to pay the price by repaying much more at the end of the month.