There are many payday loan platforms in the UK where you can access a payday loan. And if you want to borrow one, you need to do your research by shopping around for an offer that will help you meet your financial needs, and can repay it in time. Before you sign up for a payday loan, you should confirm that the lender is licensed by the Financial Conduct Authority.
PaydayLoansUK can help you with the process by connecting you with a long list of payday loans platforms in the UK. By submitting your information in one simple form, they will connect you with a network of lenders with competitive interest rates. You don’t have to move from one lender to another, which is time-consuming and challenging and can hurt your credit score.
What Are Payday Loans?
Payday loans are funds meant to keep you afloat until your payday because they help you manage bills that can’t wait till your next paycheck. Lenders usually pay them directly to your bank account. And when they are due for repayment, usually during your next paycheck, you have to pay them off in full, together with the interest rates and other accrued charges. They typically last for 30 days.
The Financial Conduct Authority (FCA) regulates payday loans by stipulating the maximum costs of payday loans a borrower should pay. For example, when you take a payday loan you intend to use and repay within thirty days, the lender should not charge you more than £24 in fees per £100 you borrowed. Also, they should not require you to pay back more than twice the amount you initially borrowed.
Payday Loans can be very easy to get, but their interest rates can be very high. Therefore before you take out one, research and determine how their interest rates, conditions, and other terms operate. Look at this site for how you can connect with one of the multiple lenders for a bad credit payday loan.
Are Payday Loans Legal and Safe in the UK?
Payday loans in the UK can be safe and beneficial when you use them responsibly. They are also legal and governed by specific rules you should understand before applying. These rules were developed by The Financial Conduct Authority (FCA) to monitor payday loans and ensure payday loan companies lend more responsibly while providing better terms for borrowers.
Some of the laws governing payday loans in the UK include:
- A total cost cap of 100% that basically means all the charges should not exceed the amount you borrowed.
- If you take out a loan for thirty days, you will pay at most £24 in interest and fees per £100 you borrowed.
- Your payday loan lender can only take up to two payments out of your bank accounts through a continuous payment authority. That is where they use your debit card to take the money.
- FCA-regulated firms must perform a credit check to confirm your borrowing affordability.
- Loans are rolled over twice. When you delay the payment, the lender can charge you a rollover which they should not roll more than twice.
- Interest rates and fees for payday loans must not exceed 0.8% daily.
Therefore it is not bad at all to go for a payday loan. Payday loans can help you when you need money in a rush, as they can be available as fast as 5 minutes, or as soon as a day.
Can Payday Loans Affect Your Credit Score?
When you borrow and repay payday loans in good time, your credit score won’t get damaged, in fact, it may improve. There are exceptions, though; For example, some companies may view payday loans negatively. They may think that customers who borrow payday loans are less reliable borrowers. Borrowing loans from such companies may hurt your credit score.
Also, any loan application that triggers a hard search which results in a new credit account being added to your profile can temporarily hurt your credit score.
A payday loan affects your score differently depending on different organizations. And that’s because credit reference agencies, lenders, and other companies have different methods and criteria for calculating your score.
What Is Considered a Bad Credit Score?
A credit score is usually a three-digit number used to judge a borrower’s creditworthiness. And as a borrower, you can get the number from credit reference companies such as Transunion, Experian, and Equifax. Lenders typically use credit scores to judge how likely you can repay loans on time. A higher credit score makes you look better before potential lenders, which increases your chances of accessing higher loan amounts, and lower interest rates.
Your credit score depends on your credit history, which involves your repayment history, the total number of debt, and the number of open accounts you currently hold. The three leading credit rating agencies in the UK, including Transunion, Experian, and Equifax, judge credit scores in five categories such as excellent, fair, good, poor, and very poor. Depending on your credit score you may fall into one of these categories. These credit scores are usually analyzed on a scale of 0 to 900.
According to Experian and Transunion, a poor credit score is between 500 and 700, and a very poor credit score is below 560. Therefore, going by Experian and Transunion, you can safely consider a credit score below 560 a bad credit score.
When you analyze your credit score according to Equifax, a poor credit score ranges between 280 and 379, while a very poor credit score is below 280. Therefore going by Equifax, a bad credit score is below 380.
A bad credit score should not have you thinking that you will not access a payday loan. By shopping around, you can find one that should help you
during an emergency.
How to Get Payday Loan with Bad Credit
One way to get started for a payday loan, even with bad credit, is by submitting your information through companies such as PaydayLoansUK. They specialize in linking borrowers to a rich network of certified lenders. Here’s how you can get payday loans with bad credit in three steps:
Fill in and Submit a Simple Form
This form usually contains details on your personal and contact information, such as your name, bank account, contact email, etc. Such information will help them link you with a lender.
Get Approval
Once you submit your details, the lenders will review your information and approve your request as soon as possible. Afterward, they will give you a quote containing the repayment loan terms and conditions.
Get Funds
Once you sign an offer, you should expect to receive your loans as soon as the same day.
