Can You get a Payday Loan if you Already have a Credit Card Debt?

Can You get a Payday Loan if you Already have a Credit Card Debt

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Existing debts can prove to be disadvantageous when attempting to get a loan or other form of credit. In the rating system used by most lenders, this plays a huge part alongside issues in previous repayments as well as recent applications. However, this certainly isn't the case for many payday loan companies.

Credit checks simply aren't as vigorous in the short term loan industry. This is for the plain and simple reason that they're not required. It's a completely alternative borrowing option, so the same rules and restrictions simply don't need to apply.

Look at it from a payday loan provider's point of view. Just how important is the fact that an applicant has 2,000 of credit card debt already piled up? This will have little or no bearing on their ability to repay the money they've borrowed, certainly no more so than the current monthly they are receiving.

Of course this isn't the same for all circumstances. If a bank is offering a loan of over 5,000 which will be paid back over three years, they want to make sure that the person borrowing this cash is going to be able to pay it back - not just for a few months, but for the entire repayment period. Therefore factors such as credit rating and associated credit card debt are given far greater prominence, and rightly so too.

Whilst a payday loan and a personal loan both offer consumers the chance to borrow money, they are diametrically opposed in many other regards. As previously mentioned, you could pay back a personal loan over the course of years, whilst there's no such luxury for those heading down a payday route.

The funds will be taken from your account on a pre-designated date in full. So you won't have months on end to save up and pay it off in bite sized chunks. It really is all or nothing. This will include all interest as well of course, so it could amount to a fair total. That said, most lenders will only offer up to around 1,000, in fact many will be significantly less than this. Therefore any repayment should be relatively pain free - assuming you aren't in severe financial trouble.

The flexibility offered by the application process and associated requirements do often leave payday loans exposed to criticism as well as desperate borrowers who simply can't afford repayments. This is an unfortunate by-product; however it is one that most accept. Credit checks are employed by some lenders, but often only to weed out the riskiest of applicants. Generally your credit cards, overdraughts and other existing loans won't have a massive impact on your ability to get cash.

As previously alluded to, it is more important that your current fiscal state is in a decent shape rather than having a spotless history. This is why your job and regular salary are scrutinised, with most lenders also setting a clear minimum level of income. Invariably it is in the best interest of all parties that repayments are swift and don't then get rolled over for months on end. Therefore any applicant should be able to prove that they will have the money available on the required date, or they can't be accepted - it really is as simple as that.

So if you do have a fair amount of credit card debt piled up, a payday loan may provide a decent short-term solution. Most lenders will be happy to consider your application and there shouldn't be any of the usual restrictions that you may find elsewhere.

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