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Bad Credit Payday Loans In UK

Bad credit payday loans in UK have been a fast growing industry in the past three years due to the global recession. Banks and other financial institutions have tightened their credit policies and have made it harder for people to borrow money. This has resulted in the increased demand for payday loans, which are short term, high interest loans. These payday loans are also known as Cash advances or Pay cheque advances.

The idea behind payday loans is that a person can borrow money with the designation to pay it back on their next payday. The repayment amount is inclusive of fees and interest that must be paid back on the agreed upon future date. In most cases the borrower will have to write out a post dated cheque and give it to the loaner in exchange for the money. They loaner holds on to the cheque until the agreed upon date, depending on whether the borrower has paid yet he can cash the cheque.

What makes Payday loans that much more desirable is that people with bad credit or people with low annual income can easily get the loan, all that is needed is for the person to be over 18 years of age and have some form of verification of employment or proof of income. They must also be residents of UK.

In the UK there are no interest restrictions placed on bad credit payday loans, borrowers have to provide the Annual Percentage Rate (APR) which can be used to calculate how much money needs to be paid back. This means that most people usually do not know how much interest they are required to pay when they take out the loan, leaving them in a debt that is hard to pay and therefore making out another loan to get by for the rest of the month, this results in a debt cycle. This has caused a number of critics who feel that this industry manipulates the well being of low income earners and the youth.

It is easy to get a payday loan even with a bad credit history in UK. This is because lenders do not carry credit checks on these payday loans. The lending institution bears the risk and charges higher interest charges if the borrower fails to pay the money on time. Bad credit payday loans are an advantage to those people who have got bad credit scores.

Loaners always threaten to take legal action on clients who do not pay back the money in time. The risk of people not paying back the loaners is incredibly high because in most cases the lenders do not get anything as form of collateral.If lenders do not get the money on time they will benefit from roll over payments. This means that the borrower end ups paying more in interest charges.

Bad credit payday loans can be seen as advantageous in the sense that they can bail people out of unplanned expenses such as unexpected medical bills or even unforeseen travel expenses. The loans are beneficial to one time users who need the money desperately to help them alleviate unexpected problems. Once the borrower starts to use this means of finance frequently this may lead to being caught in a debt cycle.

The UK is plagued with a lot of online payday loans that promise to have the money sent into your account without the need for a background check or credit history. This makes getting such loans more accessible and hustle free. Even if you have got bad credit history you can still apply for these payday loans. Bad credit payday loans in UK are easy to apply and lenders can approve the loan within a few hours.

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