Due to the credit crunch that has gripped the nation, there has been a steady downturn in the number of loans issued by banks in the past few months. The cost of living, including utility expenses and food and fuel bills are forcing customers to default on their bank loans, and as a result, banks have now become extremely stringent about their lending policies. Such selective lending has left several potential borrowers out in the cold, including those with a poor credit rating. Therefore, people who have a history of defaulting on loans need a new avenue through which to stop this downward spiral.
The long waiting times, endless lines and mounds of paperwork that a borrower has to go through are further strikes against applying for a bank loan when you are in desperate need of cash.
The advent of the payday loan industry in the UK has been beneficial to both its wide customer base as well as the economy, by providing instant financial relief to those in need, and also generating employment for thousands of people. Payday loans are short-term loans that are secured against your next paycheck, and they are used to provide financial assistance for cash emergencies which occur in between paychecks.
A lengthy credit checks includes the process of checking going through your previous borrowing history and checking for any bank loan defaults or delayed payments on your credit cards. If I turns out that you have a less than perfect credit history, many high street lenders will flat-out refuse to grant you a loan, even for a small amount. Other sources of credit may demand some kind of collateral against the loan they offer, further compounding your worries in an already grim situation.
Most payday lenders however, do not grant payday loans based on your credit history. They only require you to fulfill some basic criteria in order to be eligible for a payday loan. If you are over 18 years of age, a citizen of the UK, are employed with a steady income and have a n active savings account, then you are eligible to apply for a payday loan.
The interest rates associates with payday loans are relatively high. This is necessary, however, because, by providing short-term loans to customers irrespective of their poor credit history, the payday lender is at considerable risk. However, the interest rates charged are completely affordable, and it is entirely possible to repay a payday loan within the due date.
Therefore, payday loan providers do not conduct lengthy credit checks before giving the go-ahead for a loan application. If all the details furnished by you in the application form are found to be true, then you have a very good chance of receiving the payday loan, which will be transferred to your bank account within a matter of hours.
Samuel Lukes is a Marketing Analyst in
Lending Stream: Your UK Payday Lender. He is the author of many payday loan related articles. If you would like to apply for a payday loan, visit our
No Faxing Payday Loan website.
