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Payday Loans for Bad Credit – What You Need To Know

Credit History commonly references the state of one’s personal ability to obtain credit over time. This is then translated into a Credit Score using complex algorithms by Credit Reference Agencies such as Equifax or Experian.

Typically, CRA’s will monitor and record all public transactions made by every individual in the UK. They will use this to determine a Credit Score against their file as described above. The Score reflects a person’s ability and willingness to repay debt to Credit Providers, such as Payday Loan Lenders. 

As a Borrower, your score greatly affects the interest rate that Lenders will charge you for any loan that you may want. A low score typically reflects a poor credit history – or bad credit history.

A Poor Credit History means that the person to whom it concerns, is not managing their debt effectively and is seen as a poor risk to Lenders. Now, this could simply be a reflection of no Credit History too. Which is unfair to the individual concerned since they may in fact have an exemplary account management record. Nevertheless, the CRA’s (Credit Reference Agencies) will determine according to what they know.

Short-Term Loans for Poor Credit therefore, are loans designed to appeal and cater for those who have a poor score with the CRA’s. These loans have taken into account the greater risk imposed and their Interest Rates account for this. A good History with a Lender such as Sunshinecredit.co.uk will see those interest fees lowered and the amount available to borrow increased.

Will repaying my Sunshinecredit.co.uk Payday Loan on time help my Credit Score?

Managing your financial affairs properly will indeed help raise your Credit Score with the CRA’s. This will improve your chances of obtaining favourable interest rates. Lowering your cost per loan in the future with non-high risk Lenders. In fact, with a Good Credit History, you vastly increase your Credit source pool.

If you have a very bad credit history and CCJ’s, we strongly recommend that you repay all loans on time. Do not use high-risk loans such as Payday Loans to cover existing debt. A never-ending cycle of increased debt will ensue if you do.

Should you find yourself in financial difficulty, seek Debt Advice before taking out another loan.

Ok, I have a Bad Credit History, will you still help me? 

Yes! Just because your past financial management – or lack thereof – has not been great, that doesn’t mean that you are not now managing your finances wisely. Because of this, we will review your most recent credit history and make a decision based upon what we – you and us – can agree you can afford.

Unlike other Lenders, we will not penalise you with high interest rates, instead we charge you the same as we would for someone with a good credit score.

Are Bad Credit Loans safe? 

They are. Providing you repay your loan. If you don’t repay your loan, then your poor financial history is actually made worse. So this scenario needs to be avoided at all costs and this is where a good lender will be worth their weight in gold, so to speak.

A good payday loan lender will look very closely at your financial history and make sure that they are satisfied you are able to repay the loan. Too many times in the past, prior to effective Regulation, lenders would not actually look at a Borrowers credit file at all and simply offer the loan anyway.

This kind of bad practise led to a lot of people finding themselves in a cycle of negative debt. Happily, this occurrence has largely ended now and lenders are far more careful about who and when they lend to.

We, for example, will only lend to you if we are certain that you have the means to repay the loan. This does not mean that something unforeseen can occur that will cause you to delay repayment or default altogether. In certain circumstances, it can become unavoidable and we will not penalise you for that.

If your reasons are proven to be not of your making, we will gladly assist you with your debt with us – and even write it off at no cost to you if we feel that this is in your best interest. No other lender will suggest that, let alone put it in black and white.

Do your Research before choosing your Payday Lender

At Sunshinecredit.co.uk we want to be your preferred bad credit lender. Yet we will always advise that you perform a thorough research first. Familiarise yourself with the Terms and Conditions, Offers and Privacy Policies of all Lenders you may be interested in.

Check that your chosen lender is Licensed by the Financial Conduct Authority. Check that the lender is a member of a Trade Association, such as the CCTA. Check the lenders reviews online and also check The Financial Ombudsman website for any outstanding issues with any lenders.

Use Comparison Websites too – we link to one of the best ones on our Homepage. In this way, you can learn which Lenders will be best for your bad credit borrowing needs.

What is a ‘Soft Credit Check’ and is this what you do? 

A so-called ‘Soft’ credit check means that we do not go out to the established Credit Reference Agencies and access your credit score file. Whilst many lenders do exactly that – and for good reason – we prefer to rather use our own algorithms and checks.

A CRA search may only serve to confirm the obvious; that a Borrower has a bad credit history. It does not necessarily reveal what the most recent activity is in terms of how you manage your financial affairs.

After the basics of checking your Age, Home Address, Employment status and general eligibility, we review your incomings vs your outgoings to satisfy ourselves that you can afford the loan.

Next, we review your last 3 months activity and ascertain how you are likely to manage a loan from us. We focus solely upon your ability to repay your loan.

Our soft credit check therefore is not intrusive, respects your privacy and does not leave an imprint on your credit file – your score will be unaffected.

Your Borrowing Options

You want a loan but are payday loans for bad credit the only option available to you?

Well, this largely depends upon what you need the loan for and how much time you need to repay it. For example: let’s assume you have a car repair bill to pay. You have been presented with an invoice for a sum of money you simply do not have in your Bank Account. What do you do?

First, establish if you need a Secured or Unsecured Loan to take care of the invoice for payment. A Secured Loan requires some form of valuable collateral; a home, car or other valuable item. An Unsecured Loan is a promise to repay without the security of collateral but does allow the lender to pursue an unpaid debt via legal mechanisms such as Debt Collection Agencies and the Courts.

Secured Loans are typically larger loans and usually Instalment options over many months or even years. Unsecured can also be instalment but generally over many months rather than years (although they do exist) and they also include the payday loan option.

You have to ask yourself if a short term or payday loan will cover the debt that you have incurred and if you have funds coming in that will allow you to repay it entirely within one calendar month.

Providing that you can afford to repay within 31 days, then you can look at payday loans for bad credit.