Can you apply for a payday loan with poor credit history?

One of the most unique and liberating aspects of the payday loan is the fact that it is so widely available. Traditional forms of borrowing can be restrictive, particularly for those with poor credit or CCJs hanging over them. However, this simply isn't the case with payday loans, certainly not in all cases.

Of course it has to be noted that those in the most serious financial strife could still find themselves struggling to get financial assistance. Because whilst the borrowing rules are a little more relaxed, lenders still need to ensure that they only provide money to people who are in a position to repay it in full and on time.

Whilst some might argue that lenders earn more from those who default, there is no real advantage loaning cash to somebody who will never have the funds to pay it off in full. So they will often have rules relating to arbitrary credit ratings and the amount of salary you take home each month. This ensures that anybody who is clearly unsuitable won't slip through the net.

This is fine for most of those with a poor credit history though. Quite often people find themselves in a situation where they have been blacklisted through no fault of their own or as a result of indiscretions in the distant past. Therefore they may be in a more stable financial situation today, but still be unable to get a personal loan through the usual sources. It's unfortunate, but it certainly isn't rare.

Therefore, not only can you apply for a payday loan if you have a less than solid credit rating, it may actually prove to be one of a very few options that are actually available to you. This isn't to say that you shouldn't look elsewhere first. Sometimes you can get a long-term loan, even with financial issues. However, if you are rejected, don't panic. Because payday loans are available to those with poor credit, it often won't matter if you have recently applied elsewhere (in conventional lending, this would often cause a significant issue).

As already alluded to, it is important that you are able to match all other criteria though. Because whilst lenders might not be too concerned about your comparative credit history, they need to ensure that you reside in the country and that you have a regular income. Unfortunately this sometimes means that applicants are refused simply on the basis of their employment, or lacking a bank account.

For instance getting a short-term loan when you are self employed or a freelancer can often prove extremely difficult. The reason being that most don't have regular, reliable sources of employment. As a result the lenders simply can't gauge your risk rating and therefore are more likely to reject you out of hand. As always, there will be exceptions to every rule, so take a good look around.

You may also find that you're pleasantly surprised by the application process. Rather than being a long drawn out system, you can get an answer within no time at all. The questions aren't as invasive as a bank might ask either, simply because lenders don't require the same level of information. As well as quickening up the process, it can also remove much of the stress associated with borrowing cash.

So, in short, you certainly can apply for a payday loan if you have a poor credit rating. Whilst you will need to be able to meet the lender's individual criteria, most are more than happy to consider those with a less than perfect past. Therefore it may be a sensible borrowing alternative to a standard personal loan.

Vincent Rogers is a finance writer who writes for a number of UK businesses. For 1 hour payday loans, he recommends Paydayplus.co.uk