Any kind of loan is availed only when there is a need for funds to pay the existing bills or for forthcoming expenses. There are many kinds of loans available that are equally beneficial and prove to be supportable when there is an urgent need for ready cash. Payday loan is one such loan that has often helped millions of folk to solve their financial problems.
As the name suggests, it is borrowed money to be paid back on your payday. Thus, it is short-term loan of a small amount. It is most often favourable for University students who are yet to receive their pocket money or part-time salary payment of the month. Most salary employees prefer to use it if they find themselves short of money in the mid or end of the month. The loan is easily available as it needs few documents and no surety other than showing your payslip. You can get the sanctioned amount from borrowers within twenty four hours. The only drawback is that this kind of loans are tagged with high interest.
Payday loans are usually borrowed from a reputed financial form in the UK like LoanPig. You can know more in detail about their credentials by visiting their website https://www.loanpig.co.uk/payday-loans/. Now, many people have queries like whether a payday loan will affect their credit score. The apt answer for it depends upon many factors.
Payday loan and credit score:
- Even if you have a bad credit score, can gain a payday loan. It is because the lenders consider only your payslip to sanction the loan. Moreover, as the principal loan money is linked with high interest to payback at the due date, the credit score of the borrower doesn’t matter a lot. Hence, salary- earning people having bad credit history prefers to apply for payday loan.
- The payday loan if not paid on time is sure to have a negative effect on your credit score. However, if paid on time, will boost up your credit score. Hence, it will be profitable not to miss the date of repayments.
- Many people do take a payday loan just to improve their credit score. In the future, it helps to get sanctioned long-term loans like a house loan, vehicle loan, personal loan and more.
- A borrower may think taking several payday loans and repaying it on time will improve their credit score. However, it may doubt your creditability while availing big loans in the future. It will create a bad impression that affects your chances of getting larger amount of credit. This is because the lenders will doubt that you always have shortage of funds.
Payday loan is the best way to gain immediate cash when required to pay bills however, be cautious from whom you borrow them. You can compare the interest rate and calculate by using an online calculator provided by well-known loan providers like LoanPig. Thus, use wisely the payday loan facility and enjoy the benefits of a good credit score.