What if the car breaks down and you don’t have enough left in your bank account to pay for the repairs? What if an unexpected bill arrives or it’s been such an expensive month that you need a little to tide you over to pay your rent or the mortgage?
Millions of Brits have their own coping mechanisms for handling situations of financial stress and pressure with many turning to payday loans. In this article, the Loan Princess team explains modern bad credit payday loans as well as other approaches for people with less than perfect credit histories including:
• logbook loans,
• guarantor loans,
• loans from friends or family members, and
• saving up the money you need
There are a lot of different ways you can get yourself out of a temporary financial roadblock and the Loan Princess team hope that the information we provide you with in this piece help you to find the very best way forward for you and your family.
Logbook loan companies take ownership of your car and they allow you to continue using it until you’ve paid your loan off in full. At that point, ownership of the car reverts back to you. You can borrow up to £50,000 over a number of years with logbook loans however they can be very expensive. Please be aware too that the Citizens Advice Bureau have issued a warning over logbook loans – click here for the BBC’s coverage of that warning.
Guarantor loan companies allow you to borrow money from them only if you can find someone who has a great credit records to agree to pay them back if you’re not able to. The Financial Conduct Authority are worried about the rise of guarantor loans as StepChange, the debt advice charity, have warned that “appeals for advice from people with guarantor loans who get into debt difficulties have risen 35-fold in the past six years,” according to the Times.
If you do fail to keep up repayments on your guarantor loans, the relationship you have with your guarantor could suffer irreparable damage if they are lumbered with paying back the capital and the interest left on your facility.
Friends and family
Likewise, you should also be careful when borrowing money direct from friends and family members because the person from whom you borrow money could lose trust in you if you can’t pay them back or if you keep putting back repayment dates. However, with loans from friends and family members, there is likely to be no interest to pay and you will probably not be taken to court if you can’t pay them back.
Saving up the money
What if the situation you need to cover is not actually an emergency? Let’s say that your big TV in the living room has broken and you want to replace it with a new one. Many 55” TVs now cost between £300 and £400 so why not save up for your new TV instead and maybe use one of the spare TVs in your home until you have enough money in your bank account for the very latest 2019 TV?
What are bad credit payday loans?
You could use a payday loan or any other of the types of finance mentioned in this article to pay for your new TV but what is a payday loan today in 2019? Do bad credit payday loans really differ that much from bad credit payday loans of ten years ago?
The answer is very much a “yes”. In 2016, following concerns raised by the press and by many politicians, a new regulatory regime covered what are known as High-Cost Short Term Credit (HSTSC) loans – payday loans are considered as HSTSC loans.
Nowadays, if you take out a payday loan, you have a number of additional protections compared to borrowers using logbook loans, guarantor loans, bank overdrafts, and credit cards. The additional protections are that:
• there is an upper limit to the amount of interest you’ll pay on a loan – 80p per day for every £100 borrowed
• there is an upper limit to the fees you are charged for missing your repayment – £15 (some lenders waive this charge altogether now)
• a lender is no longer allowed to try to collect payment twice from your account and they can only impose a charge on you for the first missed payment
• there is an upper limit to all interest, fees, and charges you pay – you can never be charged more in interest, fees, and charges than the money you borrowed.
If you can, it’s always best to borrow money to cover a short term gap in your cash interest-free from your friends and family – as long as you pay them back in full when you say you can.
Each other type of borrowing, bad credit payday loans included, have their upsides and their downsides, however, as we’ve seen, payday loans do offer extra safeguards in case you fall into financial difficulties that you won’t benefit from with logbook loans, guarantor loans, bank overdrafts, and credit cards.
Access the cheapest bad credit payday loans with Loan Princess
If, after careful consideration, you’ve decided that a bad credit payday loan is the right option for you and that you’re absolutely sure that you can pay it back in full and on time, why not let Loan Princess help you to find the cheapest bad credit payday loan for you?
We’re not a lender – we’re a broker with strong and close working relationships with dozens of different bad credit payday loan lenders. Once we have all your details, we match them up to the lenders who are most likely to want to work with you. Within seconds of completing your application, we’re normally able to show you the very best offer we’ve found for your personal and financial circumstances.
Our service is completely 100% free and there’s never an obligation or any pressure to take out any loan offer we find you. To start your search, please click here.