Is a Payday Loan only for Emergencies?

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Many people know that a payday loan can be organised quickly and is therefore a good loan to turn to in an emergency. However, it might be thought that this is the only circumstance that they are good for. This is not the case though as they have other features that might appeal to borrowers and make it their loan of choice.

No credit check

The fact that payday lenders do no credit check can be appealing to many people. If you have a poor credit rating then it is unlikely that you will be able to get a loan elsewhere or if you do then you could be offered a very uncompetitive interest rate. This means that you may feel that a payday loan will be a better option for you. It is certainly worth considering if you are in a situation where you feel that you need to borrow some money and are worried that your credit rating will prevent you form getting anything else. Just the act of applying for loans and being turned down effects your credit record and so by applying for a payday loan, where there is a really big chance that you will get accepted, you can reduce the risk that your credit record will be negatively affected.

Borrow small amounts

A payday loan will normally only lend up to £1000 whereas many other types of loans will lend much higher amounts. If you only want a small amount then it can be sensible to go for the payday loan which will only lend a smaller amount, rather than taking on a large loan. Sometimes it can be tempting to borrow more than you need, so that you can treat yourself to a few extra things. This is not wise for a selection of reasons including the cost and the term. A smaller loan can feel easier to cope with, it does not feel so daunting and you will not need to borrow more than you need. With some loans you have no choice but to borrow more than you need and then you will be paying interest on far more money and the loan could last a lot longer. It can also be stressful to think about that amount of money being owed and so borrowing a smaller amount can make you feel a lot better.

Quick to repay

With a payday loan it will be very quick to repay. This is because the loan has to be repaid in full on your next pay day. This prevents you from being able to have a loan that goes on for a long time. This can be a relief for many people, especially those who are stressed by having a loan hanging around for a long time. It can be a good feeling to get the loan cleared quickly. It is therefore likely that you will have the loan paid back in a few weeks which can be a very positive thing. Knowing that it will be gone quickly and being able to make sure that it does get paid off quickly should help you to feel much more positive about the whole situation.

Easy

A payday loan is really easy to set up. The application process is really simple and it can often be done over the telephone or online. You will not have to fill out loads of paperwork or sit down with a bank manager, you can just send a few details. It can be very much easier than other loans and therefore a lot of people feel that it is preferable. Some people just get put off loans because of all the paperwork and so it can be a great relief to them knowing that they will not have to worry about this.

As you can see, the payday loan has many features which could appeal to a big variety of borrowers. Although the loan is very useful for use in emergencies because it is so quick to arrange there are other reasons that people might want one as well. Even if they do not need the money urgently, they might like to use one because they want to only borrow a small amount, want something that is easy, ant to repay quickly or want to avoid having a credit check. It is therefore worth thinking about whether a loan like this could be useful to you and if so, take time to find out more about them. It is wise to make sure that you are aware of how much they cost and consider whether you will be able to cope with repaying in one lump sum. Compare prices between payday lenders as well, so that you make sure that you find the loan which offers you the best value for money.

Can I Use a Payday Loan for Home Repairs?

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Many of us do not know much about payday loans and so may wonder whether they are suitable to use for certain purposes. It is worth knowing that while a payday loan can be used for anything, they are different to many other loans. It is therefore worth understanding how they work so that you can decide whether they are the right type of loan for you.

No credit check

Payday lenders do not do credit checks. This means that even if you have a poor credit record, you will be able to take out a loan like this. This can be a big advantage to many people. If you have a credit record that is not really bad but not perfect then you may find that you sometimes get turned down for loans. This can be a problem as being turned down will show up on your credit record and make it less likely that you will be offered another loan. A lender will see that you were turned down once and decide that as you were considered to be a risk by one lender, that they should not trust you either. They may not even do any other investigating. With a payday loan you will not be turned down due to your credit score and therefore you will not have this happen on your credit report.

Quick to arrange

A payday loan can be extremely quick to arrange. In some cases, you can get the money within a few hours. This means that if you need to get repairs done urgently, perhaps if you have a leak or missing roof tiles or something like this, then you will not have to delay getting the workman in to do the work. Most other types of loans can take a significant time to arrange and it might be too late by then and you may find that you have extra damage to your property as a result. You may even lose the workman you had lined up because you will not have the money available to pay them. This means that it is really important to get that money fast.

Short term

A payday loan is always short term. Normally you will have to repay the money on your next pay day. This means that you will only have the loan for a few weeks. Some people really like this because it means they do not have the stress of a loan for very long They will not have to think about making payments each month for a long period of time as it will all be cleared really quickly. It does mean that you will need to be confident that you have the money to pay it.

Lump sum repayment
You will normally be expected to repay everything you owe such as the amount that you borrow and the interest in one lump sum. You will be able to find out how much this will be before you take out the loan by using the calculator on the lender’s website. The lender will set up a direct debit for you and this will be on your pay day. This means that you will have a large chance of having the money available to you to repay the loan. However, it is important to check that this will be the case. You may have an overdraft that is repaid first or you may have other direct debits going out. Make sure that you find out how much will be going out so that you can be sure that you will have enough to repay it. You also need to be sure that you will still have enough money left to cover all of the other bills until you next get paid. This may mean that you will have to budget carefully and reduce your spending and that you will even have to consider ways to earn more money so that you can manage.

Conclusion

Therefore you can see that a payday loan could be a good loan for home repairs. If you need the money really quickly and have a poor credit record then it could help to pay for the repairs. You will need to be prepared to repay the lump sum very quickly though and so this means that you will have to take a look at your financial situation to make sure that you will be able to cope. It is likely that if you are very careful with your spending and do not borrow too much then you will be able to cope. It is wise though, to have a back up plan in case you are short of money, such as ideas on how to earn more. You may also need to consider whether there are other loans which might suit you better and think about whether you would prefer those and if you will qualify for them.