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Representative example: If you borrow £3,250 over 36 months at a Representative rate of 49.9% APR and an annual interest rate of 41.16% (fixed), you would pay 36 instalments of £158.57. The total charge of credit will be £2,464.57 and the total amount payable will be £5,714.67
Payday loans are basically loans that are meant to offset any unforeseen expenses that may arise in between your next payroll or paycheck. Depending on the lender payday loans may also be referred to as cash advance loans or short term loans.
Just like its name suggests payday loans typically have a term of 30 – 35 days or less. Generally, the term will last until you receive your next paycheck. However, currently, more lenders are offering different terms that exceed 35 days. Thus why payday loans are also referred to as short term loans.
Basically, payday loans are you taking out cash in advance from your paycheck due to circumstances that may cause you to be short in cash and paying them back after receiving your paycheck. Payday loans are a good alternative to fulfil your short term cash needs only when it is used responsibly.
Whether you are able to apply for a payday loan with bad credit all depends on the lender. Some lenders may not allow a person with bad credit to apply for a payday loan but there are also lenders who do give out or consider giving out payday loans to borrowers despite having bad credit.
However, the lenders may not offer the exact amount that is requested instead a significantly lower amount may be offered. There are also lenders who do specialise in providing payday loans to borrowers with a bad credit score.
Typically, they may provide you with an alternative repayment method. Instead of repaying for the loan in full after 30 days, the lender may instead offer repayments in a form of instalments. Such loans are referred to as instalment loans or multi months loan.
Depending on the terms that the lenders offer, you are able to make monthly repayments over the course of 3 months or less. By repaying over a number of instalments this will help with reducing the burden of having to repay the loan back in a lump sum.
However, the overall costs of repaying through instalments are much more expensive.
The best thing to do is to just simply ask the lender whether they provide payday loans to borrowers with a bad credit score.
Payday loans are meant to be used for small financial needs. For example, maybe you decided to change jobs and your first paycheck does not line up with your rent as some companies do not pay you until you complete at least a months worth of work.
It is important to note that, payday loans should not be used as a solution for your long term financial problem or if you are struggling financially as borrowing payday loans can be really expensive.
If you are unable to fulfil the repayment term on time the cost could stack up just like any other loan. So always ensure that when you are considering getting a payday loan it will only be used for small financial needs and only when you are certain that you are able to repay them back on time.