Tuesday 2 August 2011

Payday Loans For Those With Bad Credit

When you need money quickly, one of the most obvious choices is to pursue a loan from a bank or other lending institution. If you have bad credit, however, then traditional banking groups may not seem interested in helping you. It is not uncommmon to consider payday loans bad credit individuals can use as a last resort when you have been refused by other lenders. Payday loans bad credit individuals can use can be the right lending instrument for you as long as you understand how these loans differ from other traditional short term lending options.

In the year 2009, 1.2 million people in the United Kingdom took out payday loans. All told, there were approximately 4.1 million loans taken out in the UK, and this accounted for £1.2 billion dollars in lent money. People who are borrowing from payday lenders are taking out, on average, 3.5 loans every year. The average payday loan in 2009 was £294.

Payday loans bad credit individuals can use are not typically different from other no credit check loans. The reason is because payday lending is generally offered without a credit check. In order to qualify for payday lending in the United Kingdom, you must be employed and have a bank account. You must be able to write a check for the amount of the loan plus a fee, which is derived from a high interest rate compounded over a short period of time. The United Kingdom does not have regulations for interest rates, and so each lending institution is legally able to set their own rates.

One consideration with UK payday loans bad credit borrowers can use is that there are no regulations on how many times a payday loan can be rolled over. As such, a borrower that cannot repay the loan on the agreed upon date can roll the loan into the following month, though he or she can be expected to pay additional fees in doing so. This allows for short term lending options to become much longer term options, albeit at a price. This price should be considered when weighing whether or not to roll such a loan over.

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