While payday loans are known for helping people to cover short term gaps in their finances, there are actually many other benefits. The core features are often overlooked, which could make people believe that they aren’t a viable option. However, we are here to tell you about some the positives of payday loans that you may not have considered.
People With Bad Credit Aren’t Excluded
People with a poor credit score might struggle to secure a loan through traditional means and find it difficult to get out of their financial state, but there are many lenders who can help. There are plenty of payday loans for bad credit with no guarantor online who could help people in tough circumstances. While the lenders need to carry out affordability checks and there may be high interest rates, some lenders consider people from a range of backgrounds.
Early Repayments May Be Possible
For some payday lenders, early repayments may be possible, however, you should check the fine print on their website first. Many may charge extra fees for early repayment, but those who have your best interests at heart may encourage you to pay off the loan sooner if you can.
One of the primary benefits of a payday loan is that they are quick to apply for. Usually, the application can be filled out online and will only require a few pieces of personal data. These will be used to carry out the necessary checks and kept private within the company. Some lenders even offer same day lending decisions or cash, but you should check first before applying.
We all know how unpredictable life can be, so payday loans are usually used in emergency situations. Sometimes, it’s necessary to access money quickly, and payday lenders usually aim to pay out the cash needed as fast as possible, so you could have immediate assistance.
When a payday loan is taken out, it’s essential that the management is simple and customer-focused. The majority of lenders may set borrowers up with an account that shows how much has been borrowed, how much needs to be repaid, and any other associated details. This means that you could be less likely to receive unexpected bills.
Potentially Boost Your Credit Rating
While a payday loan may not be suited to everyone, you may see a boost to your credit rating once you have paid it off. By sticking to the repayments and paying on time, your credit file will show that you were responsible with payments and managed to complete the account. This is very attractive to future lenders.
You May Save Money
With careful and correct management, a payday loan may be able to help you save money. The loan could be used to eradicate existing debts all in one go, ensuring you won’t be hit by interest fees, overdraft costs or other charges. While this option could clear some of your debts, it should only be considered if you know you can pay back in ample time.
Short Term Financial Impact
Many loans are based around debts that are repaid over a huge number of months. This means that the debts will be hanging over your head for a long time, and potentially cause you unnecessary stress. With payday loans, they are usually to be repaid in a month, so the whole process and financial impact is fairly short.
If you would like more information about payday loans to see if they are right for you, please speak to the Money Advice Service for impartial help.