Payday Loans

Can Anyone Have Payday Loans?

There are plenty of people that do not really know much about payday loans including who they are for. This is because they are not offered by traditional banks and so you may not know so much about them. It is a good idea though, to make sure that you do know about them and then you will be able to decide whether they will be a loan that will be useful to you. You never know when you might need to borrow money and it is hard to predict what your circumstances might be like when you do need it and therefore it is a good idea to know a bit more about them and whether they are something that you will be able to use.

Who are They for?

  • Those with a Poor Credit Record – if you have a poor credit record then your borrowing options will be limited. Many lenders will want to see that a person has a good credit history – that they make repayments and payments on time, for example. If you do not have this then it will be harder for you to borrow. However, a payday lender will not look at this sort of thing, they will lend to most people and will just lend small amounts to reduced the risk to them of people not repaying the loans. They were actually designed to help out those people with a poor credit record.
  • Those Needing Money in an Emergency – the loans were also designed with emergencies in mind. The lenders realise that there are a lot of people that need money quickly and it is not always easy to get money fast. Therefore, they make sure that they money will be with you very soon after you apply and some lenders will even get you the money within a few hours. There are also some which operate outside of normal banking hours – at weekends and overnight so that you can get money any time that you need it.
  • Those Wanting a Quick Loan – there are some people that want a loan which will be repaid really quickly. This is because there are people that d not like being in debt and want to pay it off as quickly as possible. With a payday loan it will be repaid when the borrower next gets paid. This means all the money borrowed and any interest or fees will all have to be repaid in one go on your next pay day, which will be in a few weeks or maybe a few days after you take out the loan. This means that you will not be in debt for very long at all which is something which a lot of people will be happy about.
  • Borrow small amounts – some loans are for large amounts of money but with a payday loan you can normally only borrow up to £1,000 and often less. This means that the loan will be for a more manageable amount and it will be less daunting that theloans which are for really large amounts of money.

So, you can see that there are lots of features of payday loans which make them attractive to different types of people. It is worth thinking about what you are looking or in a loan and then you will be able to decide whether a payday loan will be right for you. Of course, our borrowing needs may not always be the same, so it is good to keep in mind what this loan will offer and then you can use it when it is a good time for you to be able to do so.

Payday Loans

Are Payday Loans Just for Emergencies?

There are lots of people that do not know much about payday loans. This is usually because they have not used them before and because they are not something that is offered by their bank. However, it is important for us to know about the main features of this loan. This is because the more we know about loans, the better a choice we can make when we take a loan out. It is important for us to use a loan that will suit our needs and that means that we need to know what each loan can offer us and then we will be able to pick the best one. If we do this, then it is unlikely that we will have questions such as whether Payday loans are just for emergencies as we will know this for ourselves. It is worth this question being addressed now though.

What Were Payday Loans Designed for?

Payday loans came about because it was observed that when those people that had a poor credit record and therefore could not borrow money easily, needed money in an emergency. It was very hard for them to get any money. Therefore, it was felt that they needed some sort of loan which would enable them to have money so that they could get through the emergency more easily. The payday loan was therefore started and now there are many lenders that are offering them.

Why are They Good for Emergencies?

The loans were designed for emergencies and the lenders realise that this means that the borrowers will need the money quickly. Therefore, they will make sure that they process the applications as soon as possible so that the money is available quickly. The time it takes will vary between lenders though but there are some that will be able to get the money to the borrower within a few hours. Others will take a bit longer and so you will need to check, as if you do need the money really quickly, you will need to make sure that you are able to do that. There are also some payday lenders that will be open all of the time which means that they will be able to organise loans outside of normal banking hours. This means that you will be able to get money from them at the weekends and overnight. This could be a handy feature for some people depending on when they need the money so it is worth bearing in mind that this is something that could be worth looking in to as well.

Are they Only for Emergencies?

A payday lender will not check to make sure that you are borrowing for an emergency though. Their loans will be available for whatever purpose you need. This means that you could use them when you do not have an emergency. Of course, there are other loans which take longer to arrange which could also be useful in situations like this. However, a payday lender will lend to you even if you have a poor credit record. This is something worth bearing in mind as it could make a big difference. If you cannot borrow elsewhere then the payday loan could be a useful loan to use. It does lend up to £1,000 normally, although first time borrowers may not be able to borrow this much and you will repay it really quickly. This can be great for anyone that does not like being in debt, but it might be tricky for those people that find it hard to manage repayments. This is because you have to repay everything in one go on your next pay day, so you need to plan carefully and make sure that you have the money available to do this.

Credit Scoring

How Does Credit Scoring Work?

We often here about credit scoring but there seems to be a bit of a mystery about how it actually works. It can be useful to get an idea about this though as you will then be able to make sure that you do what you can to make your credit score is as good as it can possibly be. So, a good start is to know how it works and then you can do what you can to make it as good as possible.

How Does Credit Scoring Work?

Credit scoring actually does not really exist. All of us have a credit report which has our financial details laid out in it. Then different people might look at it to decide whether they want to take us on as a customer or lend us money or whatever. Unfortunately, each of them has a different way of deciding this and there is not a standard scoring system that can be used which will allow us to see where we stand. This makes it more difficult for us, especially when we know that some lenders, for example want to see that we repay everything on time all of the time and some might be happy if we miss a few repayments as they will know that if we do that when they are lending us money, they will be able to charge us a fee and that means they will make more money from us. This therefore means that it is not easy to know exactly what to do in order to make our credit record look really good. However, there are a few common sense things that we can try.

How Can I Make Mine Good?

It is wise idea to make payments and repayments on time and in full. Although there is a chance that some lenders may not mind if we do not do this, it is a good idea to make sure that you do make them on time. This is because you do not want to have to pay the extra charges that will come about if you are late with paying them. You do not want to risk paying something late and paying the charge just in case one lender might be okay with it. It is far better to pay things on time as more lenders or others looking at your credit report are likely to want to see that.

It is also important to check your own credit report and make sure that it is correct. Sometimes it can have incorrect information on it which might be used against you. For example, you may find that there are details of a loan, which you have actually paid off or things like that so just check it and get anything changed that is incorrect.

If you do not have your name on many bills, then you will not have much evidence of making regular payments which might work against you. Therefore, it can be wise to have your name put on to things like utility bills and insurance premiums so there is evidence of you paying things. However, only do this if you are confident that the bill will always be paid on time as having evidence of things being paid late is going to work against you. Generally, it is the case that if you do things that advantage you money wise, such as paying things on time, paying off loans early and not borrowing too much money, then it will look good on your credit report as well so this is worth bearing in mind.

Credit Scoring

Why are People so Interested in my Credit Score?

You may just wonder why people are interested in your credit score and wonder why it is so important to make sure that you credit report looks good. It is worth understanding what sorts of things people are looking for and this will help you to know whether you should be trying hard to make your credit report look good or whether it is not really that important.

Trust for Paying/Repaying

Those looking at your credit report will be looking for different things, but one of the main things that they will be looking at is whether they can trust you to make payments or repayments when they are required. Often those looking at the credit report will be lenders or those that you will potentially be paying regularly and this means that they will want to make sure that they feel you will be able to do this. They will take a look at what you are paying for right now and whether you are making payments on time and that will allow them to judge whether they think that you will be able to pay them. If there are any missed payments or repayments that will cause concern that you might not be able to afford to cover their payments and it might put them off taking you on.

That You Can Afford Things

There will also be those that want to check that you will be able to afford to buy things off them. They will want to see whether you will be able to afford to make their payments on top if all of the other commitments that you have and so they will study this carefully. If you have a lot of loans that you are repaying or lots of other bills and commitments, they may worry that you will not be able to afford theirs. If you have a lot of loans, they may also worry that it might look like you are desperate for money and are not good at managing money so this might make them worry about whether you will be able to afford to buy from them as well.

Good History

They will not just be looking at what you have been doing lately but will look back as well. If you have had trouble in the past, then this will show on your credit report and it could make some people feel that you cannot be trusted. They may worry that if you have had problems in the past, then there is a big chance that there will be problems in the future and this could put them off.

So, as you can see, there are quite a few things that people will be looking at when they are looking at your credit report. So, whenever you want to borrow money or take on something that needs regular payments such as rent, utilities or insurance, then you credit report will be scrutinised to see whether you can be trusted. It can be extremely important to those people as they will want to make sure that they get their money and that is why they will look carefully to see whether they feel that they can trust you. It is therefore important that people try as hard as they can to keep their credit report looking good. Try to pay for everything on time and they will really help. So, try not to take on more than you can manage and make sure you think carefully about every financial commitment that you make and this should be able to help you.

Credit Cards

Should I Have Several Credit Cards?

It can often be the case that people will have more than one credit card. You might wonder whether this could be a good idea for you to do as well. However, it is something that you need to think about as there are pros and cons to doing it.

Advantages of Having Several Credit Cards

If you have more credit cards, it will mean that you will have access to more money. This could be extremely handy if you need a lot of money and you find that having one card will not let you have access to enough. Therefore, having another one means that you will be able to have more money. So, if you max out the one card by spending all the money that you are entitled to, you will be able to use the other one to spend money with. It might even just give some people peace of mind to know that they have a second card available just in case they run out of money and need some extra in an emergency.

You might find it easier to organise your spending better with two cards. You might spend certain things on one and other on the other, perhaps one for online and one for offline or things like this. You might have two types of card, perhaps a reward card which has interest which you only use for things you know you can afford to repay and a cheaper card for purchases that you plan on repaying slowly so you need to make sure that you have a lower interest rate for that.

Some credit cards, such as American Express cards my not be accepted in all shops or by all people. This means that if you do have one of these, then it could be a good idea to have another one as well just in case you want to buy something on a credit card and cannot do so on that particular card.

Disadvantages of Having Several Credit Cards
Although having access to extra money can seem really good, it can actually be a problem. It can be easy to spend more than you can afford to repay and this means that you could end up with a lot of debt to pay off and not be in control of your money. You can prevent this by carefully noting down what you are spending and this will mean that you will be able to keep a check on it and make sure that you are not spending more than you can afford to repay. However, with two cards it means that you will have to track two things and this could make it more complex. There would therefore be more risk that you would spend more than you could afford to repay.

Some people will also see the credit limit on their credit card as an amount of money that is there for them to spend. They will want to have fun with it and spend it and then will slowly repay it using the minimum payment amount. This is not a sensible approach at all. Firstly, it is so easy to forget how much it costs to borrow money like this. There will be interest to pay each month and when you repay the minimum payment, you only repay the interest and not much more which means that you may not be able to repay the debt for a very long time – perhaps even years and you will pay a lot of interest by keeping the debt for a long time. A lot of people will keep spending on the card as well and so it will never get repaid.