Payday Loans – Pros and Cons: Suitable for Those with Bad Credit, Adverse Credit and CCJs

Payday loans are a source of short term, unsecured borrowing. They allow a UK citizen to borrow up to £750 and receive the money very quickly, usually on the same day. An applicant will need to prove that they are 18 years old, have a bank account and are in full time employment.

No credit checks are performed so they appeal to people with: bad credit, adverse credit, County Court Judgments or CCJs, defaults and bankruptcy. A payday loan helps to fill a short term hole in personal finances. The rate of interest charged reflects the risk of default posed to the lender.

Advantages of Payday Loans

  • Speed of availability. A Payday loan can usually be approved and payment received on the same day, subject to the provision of qualifying paperwork.
  • No credit check. It is possible for those with: bad credit, adverse credit, County Court Judgments or CCJ’s, defaults and bankruptcy to get a Payday loan.
  • A Payday loan can be used for any purpose. No restrictions exist in terms of what the money borrowed can be used for.
  • Helps prevent late rent and mortgage payments. Late payment can result in bad credit or adverse credit so paying on time is important. In certain situations, it can prevent eviction or repossession from happening.

Disadvantages of Payday Loans

  • High rate of APR. Interest rates are extremely high and border upon being usury. A Payday loan represents the most expensive form of borrowing on the market, but it is sustainable provided the money is repaid within the agreed timeframe.
  • Paying bills next month. If struggling to make the repayments this month, it will become even more difficult to make any repayments the month after. The interest paid on the Payday loan will leave less disposable income, although this could be overcome by working additional overtime.
  • Uncertainty. If a fresh emergency happens it can be difficult to find the money to repay the Payday loan on time. This can result in adverse credit or bad credit, making it difficult to secure further credit in the future. Adverse credit stays on a credit report for a period of 6 years.
  • Provides only a short term financial solution. The usury rate of APR means that a Payday loan is only realistically a short term source of borrowing.

Chris Tapp of the “he Donal MacIntyre programme stated that, “We would only ever want to see people using payday loans if they have a desperate, one off short-term need and there is absolutely no other option.”

A payday loan provides a potential lifeline for someone struggling to pay the rent or mortgage. Whether it should be used to pay for a vacation is arguable. Check all other sources, such as borrowing from family or friends, before opting for a payday loan. If a payday loan is taken out, make sure that it is paid off punctually and in full.

Student Loan Consolidation Cash Back

There are certain programs that provide student loans consolidation cash back offer. It has been observed that the financial crisis that students have been facing since recent past has persuaded the government to reduce the interest rates on the student loan consolidation programs and though inflation is observed to be on rise in other areas, the interest rate on student loan consolidation programs are still low. The main intention of the government is to help students get rid of the debt as soon as possible. This will also motivate many students to continue their studies even if they lack necessary fund.

Also proper care is being taken that the monthly installment is reasonably set so that the students who opt for the loan consolidation programs are able to repay their loans comfortably too. It has been observed that students are facing problem repaying their student loans and at the same time college costs are also rising rapidly. Students have no choice other than obtaining a number of loans to complete their education. Once these loans are acquired one has to follow the repayment schedule and start repaying the loans once the grace period is over.

Usually the requirements for student loans consolidation cash back offers are that the student actively repays the installments without fail right after the grace period ends. To be eligible it is essential that the student has completed his education and the grace period is over by the time he approaches for the cash back advantage. Another factor that decides the cash back is the amount of the loans taken by the student. The bigger the amount, more money as cash back is offered.

The interest rate is also low for the cash back offers as compared to others and if the next 48 installments are paid off without fail, there is further reduction of one percent. With manifold benefits it is good to find out for the students whether they qualify for the student loans consolidation cash back offers or not. This will help them get further and substantial reduction is repayments and that could be a great relief.