With the influx of payday loan shops on our high-streets today, it can often make one wonder whether taking out payday loans no brokers would be a wise thing to do; how would they compare to a loan given by a bank? To answer this question and to decide which option would be best for you, you would have to take many factors into account including your current financial circumstances, credit score, and more.
Your Credit Score
We’ll talk about your credit score first, as this is probably going to be the most important thing in the eyes of your lenders. The majority of banks may be hesitant to lend money to you if you have a bad credit score, this means missing payments, going overdrawn for extended periods of time, and just overall being in a bad financial standing. In contrast to this, payday loan shops have been made specifically for people with poor credit scores who are unable to get a loan from their bank. So even though the interest may be higher on a payday loan, it may be your only option if you don’t have a very good credit score.
Duration of Loan
Generally you will want to go for a bank loan if you intend to have the loan for a long time. This is because the interest rates are much lower so it will be much better in comparison to taking out a payday loan. Also if you are making a more expensive purchase and taking out large sums of money, it would be a wise choice to do this with a bank whom you trust and have an already existing relationship with, rather than going to a brand new payday loan shop on the high-street.
Payday loans uk may be better suited for you if you only intend to have the loan for a short period of time, hence the term “payday loan” – their main purpose is to provide you with extra money until your next payday – don’t take a payday loan out if you plan to have it for longer than 30 days as the interest rates will be sky-high.
To conclude, the best option when taking out a loan will depend entirely on your own individual circumstances and you will have to take a lot of factors into account. For short-term loans that you intend to pay back by the end of the week or so, a CheekyPayDay payday loan may be more beneficial as it will be simpler to get approved for and the interest rate won’t be too high.
In contrast to this, you will definitely be better off taking out a bank loan if you’re going for a more long term option. This is simply because the interest rate will be much lower and if you’re taking out large sums of money, you will probably be more comfortable going through an organization such as a bank. However, you may struggle to get approved for a bank loan if you’re credit score isn’t very good, so you should keep this in mind.