Everybody needs some help in making ends meet. With rising prices and stagnant wages, it is quite obvious that the UK middle class is feeling the heat. In such circumstances, many of them are turning towards payday loans and other such instruments of credits. If you are looking for short term credit too, here are a few things you should be aware of.
What are payday loans?
These are very short-term credits that can be used for a maximum of 30 days. The APR of these instruments could be as high as 300%. With such high rates of interest, they are available to you in times of dire needs. They are not provided by banks, but by specific lenders who specialize in these credits. These are unsecured loans and you guarantee the lender that you will pay off the debt as soon as your next paycheck arrives. This is the reason why these loans are never available for more than 30 days at a time.
Who can avail these loans?
If you are a UK citizen over 18 years of age with a full-time or temporary employment, you could get a payday loan. Your credit score is often not asked for while providing these loans. However, the loan amounts are often small. The lenders will give a certain percentage of your paycheck as a debt. Note that these lenders should always be certified and trusted companies like heartloans.co.uk. They have years of experience in providing quick loans to people in need at highly competitive rates. If you get loans from shady companies, they will ask for unreasonably high interest rates, which could even make you go bankrupt.
Can these loans be rolled over?
Yes, the payday credit is usually rolled over like a credit card. However, this is not an acceptable method of paying back. You should always pay back in full as soon as the next paycheck arrives. If you have to take care of several loans, pay off these short-term liabilities first. With high APR, they could become extremely problematic for you. Ask the lender about the repayment terms and the total amount you need to repay in advance, so you are prepared for the payback.
Will a payday loan affect the credit score?
Yes, it will. While most lenders will not ask for your credit scores when providing these loans, they may maintain your accounts. These can be used to ascertain your creditworthiness. Ideally, a payday loan should be a one-off thing and not a regular thing for the users. Also, you should not rollover the loan to the next month. This will not only drain your finances but also make you more liable to get a smaller score on the credit report.
Payday loans isn’t for everyone but as times are changing, you may need a quick and dependable funding option for your needs. These debts are not inherently bad but given their high interest rates, they could be very tricky to navigate around. Understand your risks carefully before taking any advances or debts.