What is a bad credit emergency payday loan?
A bad credit payday loan is a form of short-term finance designed to help those with poor credit ratings overcome life’s unexpected money emergencies. These loans are heavily regulated by the Financial Conduct Authority (FCA).
Payday lenders can offer high-interest loans for up to 12 months, with a cap on fees. These caps mean that you will never be expected to pay more than £24 per month in interest on each £100 borrowed. You’ll also never pay more than double the original amount you have borrowed.
What is bad credit?
Bad credit is a term used to describe the current financial situation of a person with a history of poor financial management. People with poor credit ratings are likely to have failed to keep up with credit payment obligations in the past. These obligations can include utility bills, credit card payments or loan repayments.
Having bad credit can prevent a person from obtaining finance from mainstream lenders, such as high street banks. By its very definition, bad credit is an indicator to lenders that a borrower presents a risk to them in terms of making repayments. This is based on their history of failing to meet repayments.
Bad credit payday loans explained
Bad credit wage day loans are designed to meet the needs of those who need urgent access to cash, despite having a poor credit rating. They are a small number of short-term finance products available to those with a bad credit score.
These loans typically have high-interest rates, which reflect the risk taken by the lender. Therefore, before taking out a bad credit emergency payday loan, you should ask yourself, “can I afford to repay this loan in full and on time?”
When taking out a bad credit loan, it is imperative that you borrow within your means and stick to your repayment commitments. Failure to do so could result in even further damage to your credit rating, which could severely impact your ability to access credit – even in the form of high-interest loans – in the future.
I’ve never borrowed any money – why is my credit rating so poor?
A bad credit score is usually an indicator of financial mistakes you have made in the past. However, sometimes a low credit rating can occur if you have no borrowing history whatsoever. If you’ve never borrowed money, traditional lenders will have no inclination as to whether you’re trustworthy enough to make repayments on time.
By taking out a bad credit payday loan and repaying it as agreed, you could actually increase your credit score. This could improve your chances of accessing credit from a wider range of sources in the future.
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Bad credit loans direct lender information
All forms of personal borrowing should be issued and approved by an FCA-authorised direct lender. Bad credit payday loan products are no different.
If you feel confident about your credit rating and believe most bad credit loan providers will approve your loan request, you might find it useful to compare your loan options to ensure that you’re getting the best possible deal from a direct lender.
Most payday loan direct lenders are happy to provide third-party customer reviews, which should help you make an informed decision.
Credit brokers for bad credit loans
If you’re looking for quick loans for bad credit via a direct lender, it can be a good idea to use an online credit broker. Payday loan credit brokers scan the entire market of direct lenders in a matter of minutes to provide you with the best possible deal in terms of acceptance rates and APR.
You’ll find it much easier to get accepted for a loan with a lower APR when you use a reputable credit broker – which is where we come in. So why not apply for a payday loan today with us?