Weekend payday loans
If you need cash at short notice, then you might turn to an instant decision short term loan on the internet. However, many of these loans are not available outside of office hours. What would you do if you were desperate on a Saturday or Sunday? Whether it's a bill for car repairs for another emergency, fortunately there are some weekend payday loans that might be able to help.
What are payday loans?
If you are struggling to get by and need an urgent cash boost, a standard loan can take too long to come through and borrowing from family and friends is out the question, a payday loan could provide the solution.
There are some significant differences between short term borrowing and standard loans, so it's important to be aware of the features. Typically, payday loans must be repaid within 30 days, usually on your next payday. Due to the nature of this type of loan, you can usually only borrow up to £1,000, whereas a standard personal loan may have a minimum of £5,000 or £7,500.
Another big difference is the interest rate. While a standard loan might have a rate of around 5% APR, weekend payday loans may be in excess of 4000% APR. It sounds outrageous, but as these loans are only borrowed over a month, rather than a year, the Annual Percentage Rate isn't really applicable.
Comparing payday loans
When applying for a payday loan, you'll likely be informed of the interest rate and total charge before proceeding any further. This gives you chance to see exactly how much you are going to pay for the loan.
A more appropriate way to compare short term borrowing is with the cost per £100 borrowed. Rather than paying too much attention to the interest rate, it's worth seeing how much it will cost to borrow £100. Most payday lenders charge around £20 per £100, but it does vary depending on the provider.
However, should you default on the repayment and roll over to the next month, the interest rates will come into play again. Due to the potentially high cost of borrowing with a payday loan, it's even more important to avoid missing payments.
There are benefits to payday loans too; unlike traditional loans, the repayment period is not fixed. Should you be able to repay the loan in full, or in part, before the date, the total cost of borrowing will be reduced. Most lenders don't charge an early repayment charge and repaying early can significantly reduce the total cost.
In order to be eligible for weekend payday loans, there are some requirements, although this is a general list, they will vary between lenders. One thing that won't change is the age – you must be at least 18 years of age to apply for any form of credit, including payday loans.
•Employment status: it will be difficult to find a payday loan willing to accept you if you are not in full-time employment, although not impossible. There are lenders that may offer smaller loans to those working part-time or on benefits. Self-employed people can also struggle due to the difficulty proving income, but this isn't always the case.
•Bank account: the payday loan has to be deposited somewhere, so in order to apply you will have to have an active account. If you have a poor credit rating and struggle to get a current account, one of the most basic accounts should suffice. However, most lenders will also require a debit card to make the repayment.
Benefits to weekend payday loans
Unlike most traditional forms of credit, payday loans are available 24 hours a day and 7 days a week. It doesn't matter whether your financial emergency occurs in the middle of the night or on a Sunday, you can still receive cash in your bank.
Most lenders do not require a credit check when applying for a payday loan, but they will need to see proof of income. This is ideal for people that have struggled with their finances in the past, but are now on the road to recovery with full-time employment.
Visiting the bank to apply for a traditional loan can be time consuming for many people. When working 9-5pm Monday to Friday, it's difficult to find time to make an appointment with the manager. Payday loans have simple online applications that often take less than five minutes to complete. Once it's been submitted, you can expect to receive a decision almost immediately and get the money in your account within the day.
Improve credit score
Payday loans are often a popular choice of credit for people with poor credit scores as they may be unable to access other loans. However, the upside of borrowing with a short term loan is that it can boost your credit rating.
There are risks to borrowing with a payday loan so it's absolutely imperative that you are able to repay the loan in full and on time, to avoid any negative impact on your credit score. However, if you borrow effectively, you should be able to reap the reward.
It's probably better to start off with something small to ensure that are able to repay in full. Once you've repaid the loan, it will be noted on your credit report. At present, there is no requirement for credit reports to disclose what the type of borrowing is, so other lenders won't know you took out a payday loan.
By keeping the amount to a minimum, say £50 or £100, you will be more likely to be able to repay and get that all important mark on your report. By having a successful loan on file, lenders are more likely to have more confidence that you will repay and allow you to borrow again.
After a few payday loans have been repaid – although make sure you space them out as not to indicate financial difficulty – you should start to see an improvement in your credit rating.
Overall, weekend payday loans have numerous uses and benefits. Although there is a lot of controversy about the cost of short term borrowing, these loans are not simply a vehicle for unmanageable debt, they have lots of positive benefits when used effectively.