Bad Credit Loans

Case Study

John is a Welsh Sheep farmer who farms in deepest rural West Wales. The farm was owned by his great great grandfather and so when he hit money problems the last thing that John wanted to do was to have a loan secured against his property. At this point, John had never even heard of a cash advance before his payday.

John hit hard times when his sheep were hit by a mystery illness. Over time they began to lose weight, stop eating and John lost every one of his lambs that year and half his adult ewes.

Usually, John would be sending in the region of 300 sheep to market that year but there were none to send. Not only that, he had to buy in more breeding ewes to replace the ones he’d lost through illness.

Gradually his savings began to be depleted and it wasn’t long before he was worrying how in fact he would survive without a ‘buffer’.

John told us how he saw an advert on TV for bad credit payday loans:

‘I don’t usually go for this sort of thing’ he told us, ‘but I was getting really desperate by this point’.

He didn’t have access to the Internet himself so the next time he was round at his friend’s place he filled in the application form online. ‘Not without a certain feeling of trepidation’ he says.

A loan of £1525 was agreed against John’s earnings as a steward at the local auctioneers and was in his bank the next day as it was too late for the transaction to go through that evening.

The money was enough to let John get back on his feet and pay off the huge vets bill and now he is up and running again in earnest.

This particular case shows how the cash loan can help the most unlikely of people in the hardest of situations make the most of the opportunities at their disposal.

Please note however that the interest rates charged are higher than your normal loan through a bank or other financial institution so it is imperative that you make sure you can afford that repayment before you apply. Having got that out of the way though there is no doubt that the same day advance can be an absolute life saver for people like John who genuinely need a hand in times of financial crises.

These loans are covered by the borrower’s pay packet. These loans are fast and easy to process and do not normally require a credit check. This makes them suitable for someone in need of credit quickly, and may not meet the necessary requirements set by traditional lending institutions. In your search for a payday loan there are number of factors you should consider which could greatly affect the amount, cost and ease of credit offered by the loan.

These factors include:

1. The Borrowing Limits

Payday lenders impose certain limits to the amount that they are able to loan to prospective borrowers. These limits can vary from one lender to another therefore it is important to consider the minimum and maximum borrowing limits imposed by your prospective lender to determine whether they are able to cater to your borrowing needs.

2. Repayment Period

The normal repayment periods set by lenders range between 2 weeks to one month. You should consider the intervals in between your paydays to make the best choice of UK payday loan. You should also confirm the rules that govern any fines or charges in the event of default, just to make sure you can meet such expenses in the future.

3. The Application Process

In the application process most lenders will require a number of documents. These documents may include proof of income/employment, proof of your name and address and proof of your bank account etc. You should confirm that you have all this documents before making your application.

4. Fees and Charges

The fees for payday loans can vary from one lender to another. They are usually charged as a flat fee per 100 pounds lent, such as 25 pounds per 100 pounds. You should look around for the lowest possible fee for lower cost of borrowing.

5. Roll over flexibility

Since there is a chance that you might default on your payments at some time in the future it would be wise to select a lender that allows you ‘roll over’ or ‘extend’ your loan to the following month. You should bear in mind though that you are likely to accrue more interest charges in the event that you default.

6. Mode of Payment

Different lenders accommodate for different types of payment methods such as postdated cheque, standing orders, or a direct debit into the lenders account. You should check the repayment method set by your prospective lender and confirm that you are able to comply with these instructions.

7. Method and Speed of Transfer

Payday lenders use a variety of methods to pay prospective borrowers such as hard cash, a direct transfer to your account etc., which can determine how soon you can have access to the money. You should select a loans site that suits your monetary needs best.

Cash loans are a great convenience to have especially when faced with short term liquidity concerns, such as medical emergencies, house bills and the like but you should always consider the above named factors in your selection process to make the best of your UK payday loan.