Is a Payday Loan only for those with a Low Credit Score?

If you have hard of a payday loan then you may think that it is just for those with a poor credit score. You may know that the payday loan actually came about to provide a borrowing solution for those with a poor credit score because there were not any other borrowing options for them. This may lead people to thinking that it is a loan only for those with a poor credit rating, but it can be used by anyone.

How the loan compares
As the loan is available for everyone, whether they have a poor credit rating or not, it is good to consider it if you are looking at different loans. It is a very short-term loan and so it may not be suitable for all needs and it will only give you access to a few hundred pounds, which again will not suit all needs. However, it is an option that is good to review as until you know how it compares to other loans then you can decide whether it is a good choice for you.

A payday loan can be arranged very quickly and there is no credit check. Most other loans do require a credit check and can take some time to organise. You may be able to get the money within a few hours if you choose a payday loan. You can borrow a few hundred pounds, which may or may not be enough to help you out. A smaller loan can be better as it means that you are able to cope with it more easily but it may not be enough to help you out. You have to repay the money when you next get paid in a lump sum. This can be good as you are able to clear the loan very quickly. However, it can also be difficult because you have to come up with the money all in one go and it could leave you short for the rest of the month to pay for other things. Other types of loan differ a lot, some with strict repayment schedules, some where you only have to pay a minimum amount, so some could be easier for you to personally manage than others.

One big issue with payday loans is the cost. Many media reports have had scare stories about people who find them hard to cope with and say that they are expensive. They are a risky type of loan because lenders are not doing a credit check. In order to protect themselves against the costs of borrowers not repaying the loan; they charge more. Tis can be off putting but if you want the advantages of a payday loan then you will have to be prepared to pay for them.

Advantages of a payday loan
The advantage for you of payday loans online will depend on what you are looking for in a loan. If you need money really quickly then it could be the best option available, especially if you have no credit card or overdraft facility and so need time to apply for one. If you want a short loan that will not last long then again it could be a good choice for you as it has to be repaid within a few weeks which is probably one of the shortest repayment schedules for a loan. If you want a loan for a small amount of money then again it can be a good choice, as some loans give very high minimum amounts.

So, a payday loan should not be discounted as a loan choice just because you have a good credit score. It does have many differences to standard loan and some or all of these could make them a better option than other types of loan. Whenever you are picking loans you should be careful with your decision though. Consider what you want from a loan for example, how much you need to borrow, what repayments you can afford, how long you want the loan to last and things like that. Compare the different types so that you get a good idea of what they offer and how they compare to your requirements.

You also need to compare different lenders once deciding on what type of loan to go for. This will help you get a loan even closer suited to your needs and should also allow you to find the one that offers you the very best value for money.

This can take some time to do, but it is worthwhile. Keeping open minded about what type of loan will be the best for you will mean that you have the best opportunity to find the right loan for you at the best cost. It is worth the effort as you will end up with the best choice.

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