All You Need to Know About Payday Loans

This article covers all you need to know about Payday Loans and our direct lender partners.

What is a Payday Loan?

A payday loan is a relatively low cash loan to cover any unexpected or unplanned circumstances, typically when you need money in a hurry. Payday loans are repaid in one to 4 repayments usually on your payday. The majority of lenders encourage you to apply online, using a short application form.  If you have had credit difficulties in the past, you may be accepted for a payday loan which will show on your credit file, this can improve your credit score.

Payday loans are typically taken out to pay for smaller expenses. If you unexpectedly a get an emergency car repair bill, for example that hasn’t been budgeted for.  A payday loan would enable you to the pay the garage and then repay the loan over a few months.

How does a payday loan differ from an instalment loan?

Short term loans both describe instalment and payday loans. Instalment loans are generally paid over a few months, Payday loan are typically repaid on your next payday. At THL Direct, our direct lender partners offer instalment loans.

Payday loans are generally to pay for lower cost items – At THLD, with our direct lender partners, you can borrow between £150 and £1000. You can borrow the money for up to 6 months. A payday loan is generally used to pay for unexpected expenses that could happen at any time, and you haven’t got the money to pay for it until you get paid.

With either a payday or instalment loan interest is applied daily. The loan conditions allow you to make early repayments and save money on interest.

Some of the good points of a Payday Loan?

If you have an unexpected expense but don’t have any spare monies saved up to pay for it , it may be there are limited options available .It can be hard or a little embarrassing to ask family or friends to borrow money for a short time and it may also leave them short to pay for their regular expenses.

If you have got a great credit score, you may have more options on taking out a conventional loan from your own bank. There is also the chance you end up borrowing more than you need as some lenders have a minimum loan amount. Also if you use your overdraft facility it could cost more than the loan, so it’s important to weigh up the different options.

Many people look at using a credit card to pay for short term expenses. It might be wise to have a look at to get some comparisons. However if you have had problems with credit in the past, or currently, you may only be able to borrow from a credit card company that will charge you more interest than the high street ones.

The advantages of choosing a payday loan include the flexibility options of the product and the loan sizes. It’s important to only borrow the amount you need and can afford to repay.

If you need fast money for an emergency, you may opt for a same day loan or a payday loan. At THLD, our direct lender partners try to pay out your loan on the same day. We are UK based and welcome calls into our office to answer any questions or concerns. We don’t have a call centre based abroad we are based and work in the UK and work normal office hours.

Payday loans often are a good solution for many people who have poor credit history or a low credit score.  High street lenders and banks generally lend a higher sum than a payday direct lender. With the higher loan amount, banks are taking a higher risk. Payday direct lenders tend to lend a small amount. At THLD, our direct lender partners are able to offer a loans from £150 to £1000.  It’s important to make your repayments on the due date as the loan is registered with credit reference agencies and this will improve your rating.

Unfortunately, short term loans or Payday loans have a poor reputation as some lenders in the past have not taken credit reference checks or affordability checks.

At THLD we understand that bumps happen in the road, and our direct lender partners take that into consideration when making a lending decision. They look at various factors when they make a decision to lend including making sure the loan is affordable. You may want to speak to the Citizens Advice Bureau for help and guidance.

What’s the chance of getting A Payday Loan if I had Bad Credit in the past?

If you find yourself researching for a payday loan, a poor credit score might cause you problems. The credit agencies keep your history on file for 6 years so a bump in the road might cause you a problem getting a payday loan today. Some payday lenders may decline your application due to your credit information.

You may read about terms such as guaranteed payday loans for bad credit. However not many payday loan lenders will grant a loan if you have had poor credit.

Here at THLD we know from our own experience that a lot of clients credit files have some sort of blip. Our direct lender partners look at your circumstances, taking that into account. It’s fundamental to assess someone’s income and expenses as well as their work situation. Once your application has been submitted, the loan underwriters will look at your credit profile, income and expenditure and other factors when make a lending decision.

It’s always a good start to look at your own credit score using a free credit search company – ask Google and it will come up with lots of options.

When you search for different loan options you may look at payday loans with no credit check, however at THLD our direct lender partners will do a credit check as well as look at your income and expenditure and other factors to make a lending decision.

What is the APR on a loan?

It’s the Annual Percentage Rate – known as APR – it’s the rate of interest you would pay over the year. All payday direct lenders publish their representative APR of their loans. This does look like an eye watering amount on payday loans: APR is best used to compare loans taken out over a longer period.

Paying back your payday loan.

Your loan is paid back on your payday. The payments are collected via your debit card. If you prefer to pay by bank transfer just get in touch and we will organise it with you.

If you are unable to make the repayment on the due dates, please get in touch and we will work with you to get things back on track.

THLD is a good option for Payday Loans?

We hope you have found our article about all you need to know about payday loans useful. If you need a payday loan we are are here to help.

We have developed our systems to keep things as simple as possible. The application is simple and easy to complete. Our direct lender partners aim to approve your loan and pay it out to you within the same day. When you complete the online form, we gather your personal information, your income and expenditure and your bank details.

The loan underwriters will then look at your credit check together with all your other information to make an informed and responsible decision.

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