There can be some confusion at times as to who payday loans are for. This is because they are fairly new to the market and there are a lot of people that have not used them before and have not found out much about them. Therefore, assumptions are often made which may not be correct. It is really worth knowing about all loan types though. If we do not know about them and how they work though, we will not know whether they will work for us. It is a good idea to make sure that we do know lots about all of our options and then we will be able to pick the best loan for us.
Who are Payday Loans for?
With a payday loan, people often just assume that they are not for them and therefore they should ignore them. However, it is a really sensible idea to think about who is allowed them and then you will be able to decide whether they are suitable for you or not. Loans differ in the way they work and this means that they end up being suitable for different types of people. With payday loans there are no restrictions on who can use them, which is different to many loans. Most loans will require the borrower to have a good credit rating. This means that the lender will look at their credit report and find out how well they seem to manage their money and how much income they get in and they will judge them based on that. This means that there are many people that will not be able to get a loan like this because they have had financial problems, they have a low income or they have not borrowed before so cannot prove they are able to repay the loan. However, with a payday loan, this is not important. The lenders will allow those with a poor credit score to still have a loan if they wish to.
The loans are for small amounts of money up to £1,000. This means that you will only find that it will work for you if you are interested in borrowing smaller amounts. Otherwise you may need to look for a different type of loan. You will also be wise to look into the repayment of this type of loan. It is quite different to the way that you normally repay loans in that you will need to repay it all in one go when you next get paid. You will need to agree to having a direct debit set up so that the payment goes out automatically when you are paid. This will help you to remember to pay it, but you will need to make sure that there is enough money available to do this and to pay any other bills that you have coming out of the account at that time.
Are They for me?
So whether they will work for you will depend on your circumstances. It is always wise to compare all of the loans to try to work out which is going to be the most suitable for you. You need to think about what your requirements are and then you will be able to work out whether this sort of loan will work for you. It is good to bear in mind the main features of the loan and that should help you to think about whether it will suit you or not. So, the loan is suitable for those with a poor credit record but it can be used by anyone else as well as it might have other advantages suitable for them. The repayment process, for example, could be beneficial because it has to be repaid in full very quickly. This is suitable for people that do not like the idea in being in debt and want to repay quickly. The amount that you can borrow is also small and this suits borrowers that do not want to borrow a lot of money.