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Who payday loans are for

It can be easy to dismiss the idea of getting a payday loan for a number of reasons. One main reason could be that you do not think that they are for you. It is important to understand who payday loans are designed for so that you can decide whether you might fall into any of the categories and whether therefore, you might consider them at some time.

Poor Credit Rating

Payday loans were first set up for those who could not borrow money elsewhere. It was seen that those that had a poor credit rating were unable to borrow money from anywhere and it was felt that they should be given the opportunity to do so. Therefore, payday loans came about so that anyone was able to borrow money, even if they had a poor credit rating. This could be seen as making borrowing more inclusive to all and enabling those that could not get a conventional loan the opportunity to borrow without having to resort to illegal lenders. However, there is no rule that if you have a payday loan you have to have a poor credit rating. No credit check is done which means that they are available to anyone regardless of their credit rating.

Need Money Fast

Payday loans can be arranged very quickly. Some lenders will get the money to a borrower within a few hours and this will mean that if you need money for an emergency then it will be there for you. Sometimes this can even be done overnight or over a weekend – you will not always have to wait for normal working hours. If you apply for other types of loans, the application process can take weeks and so you may not get the money on time if you rely on these. So whether you need the money in a few hours or a few days, then this can be a better option than waiting for applications to go through for other types of lending.

No Other Options

It may be that you have used up all of your short-term borrowing options. You may have a maxed-out overdraft and credit card and therefore cannot use these. Applying for another card or an extension to your credit limit can take time and may even be refused and therefore a payday loan can help in this situation.


There are a few restrictions on who payday lenders will give money to. As with all UK lenders you have to be resident in the UK and be over the age of 18 and have a UK bank account. You will also have to have an income and be able to show when you get paid. This may not necessarily have to be a salary though, but you will need to have regular payments. Lastly, you will have to be able to prove who you are by using documents such as a driving licence, passport or utility bill. This may seem like quite a lot of conditions, but actually they are far less than with  most lenders who would want to do a credit check and possibly even see if you have any collateral for backing a loan.

As you can see, it could be that a payday loan will be an option for anyone. If we are in a situation where we need money quickly, have used up our credit limit or have a poor credit rating, then we could find that this is the only option left for us. No one wants to have to borrow money, but if we really need it then this could be the only option available.

It is wise to be careful though, as with all forms of borrowing. There are some features specific to payday loans which you need to be aware of

 With a payday loan you will only borrow the money for a few weeks; until you next get paid. This means that you will need to find the money to repay the loan very quickly. This can be great, as it means that the loan is cleared really quickly and as you repay the money on your payday you should have money available. However, if you have other bills going out that day and an overdraft, then they may not be money left I the account to pay the loan off. Also, even if you do pay it off, you will be short of money for the rest of the month. This means that you will need to budget really carefully. You will need to make sure that you can manage to pay everything that you need to and this might mean really cutting back elsewhere and perhaps looking for ways to earn more money too. This can be tricky in such a small space of time but it could be necessary in order that you can manage.

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