Getting a payday cash advance is usually a last minute
solution for most people's financial woes. You may be in a situation where you
have bills that have to be paid and rent that is due, but you are not going to
be paid until a week or two later. In these cases getting a payday loan could
be a good way to bridge that gap and obtain cash immediately. However, it is
important to remember that you must only get a payday loan if you are certain
that you will be able to pay it back on time. Not paying back a payday loan can
have disastrous implications for your credit score.
Fast payday loans are so sought after because they get you
cash in your bank account within 24 hours. All you have to do is fill out an
application for the same day cash loans and you can have the cash in your
account the next morning. A few basic personal details are required and a
direct deposit statement from your employer is also necessary. This shows the
payday lender you have a steady stream of income and will be able to pay back
the loan. Same day loans can range from £75 to £1000, depending on how much you
qualify for and how much money you need.
Payday loans come in a rigid structure, in terms of their
payback schedule. The loan must be repaid in a time frame of one to three
weeks, dependent on when you are next paid by your employer. And the money that
must be paid back is usually slightly higher than the amount of the loan,
reflecting a high interest rate that compensates for the risk the payday
lenders are taking. It is important to remember that payday loans are high risk
because the people asking for them are in a poor financial situation; otherwise
they would not need the loan in the first place.
If you do not pay back one of the fast payday loans you get,
your credit score is severely hurt. Typically the payday lender will give you a
few chances to pay the loan back. They will simply increase the interest rate
and give you a week or two extra to pay them back. However, if you are unable
to do so then they will have no choice but to report you to a collections
agency. Once you are reported to a collections agency you can automatically
assume your credit has been adversely affected. This will appear on your credit
report as a loan you defaulted on, which can bring your score down by a lot.
Once your score goes down it can be a huge challenge to bring it back up.
While payday loans are convenient and can save people from financial emergencies, they also carry heavy penalties. Most regular loans have payment plans that involve paying a monthly amount and paying off the loan over a period of time. Same day loan contracts are different in that the full amount plus interest must be returned within weeks. That is difficult for some to manage, particularly those who are not in a good financial state. So it is important to be very careful when you get a payday cash advance. Only take an amount that you need and an amount that you know you will be able to pay back. Defaulting on a loan you take from a payday lender is a terrible idea. You will end up ruining your credit rating and depriving yourself the chance of ever getting a credit card or a loan again.
