For those looking into the payday market for the first time it can be a confusing and sometimes complicated place if you don’t know the rules. For those without an employer this is doubly true. This anomaly of payday lending can mean that for those that are self-employed cash before payday can be out of the question.
Payday lenders nowadays will often judge your application based on a number of factors, and any number of elements for each factor. The lending decision cannot therefore be based from just one of those. Please look through the links below for all information on how the process works.
For those with a less than perfect credit score it can also be problematic as they worry about their chances of approval. For people who may be discouraged from applying for a short term loan due to prior credit problems, most lenders will receive the application based upon your current circumstances, including aspects such as your employment and current commitments.
Bad credit should not be a reason for not making an application – as we search our extensive list of lenders to get you the loan to suit your needs.
Why do some companies not approve loans for independent workers?
If there is one constant in the world of personal finance that blights the lives of the masses across the UK, it has to be the dreaded credit-rating system. At any one time on any given day, vast swathes of the consumer population are effectively rolling the dice when making applications for finance, wondering whether or not their credit scores will allow them to access any help at all. While the credit rating system exists largely behind the scenes, it can have the most profound effect on a person’s life when it comes to the financial services and products they are and aren’t granted. From insurance policies to hire-purchase to mortgages to bank loans and right through to mobile phone contracts, those that dare fall foul of the credit demons are generally in for quite the rough ride.
When it comes to those that are self-employed the credit score system does not help those that fall under this category. For the very simple reason that this group of ‘workers’ are a somewhat unknown quantity.
Sadly, said rough ride is what awaits millions across the UK due to the fact that obtaining loans while working for yourself is harder today than it has ever been.
Here with Simple Payday we work with lenders that will accept those that are self-employed, this means that no matter your tax bracket, credit profile or home status our lenders will consider your application on the same day and give you a decision quickly as to how much or how little you are eligible to borrow.
Improving my credit worthiness to get a loan
There are so many ways and means by which to destroy a credit record that avoiding damage is largely becoming and impossibility for most. Even applying for credit in the first place has the potential to lead to large black-marks across a credit report, which makes things all the more difficult for those looking to remedy an already damaged report.
After all, how can a person safely apply for credit, knowing that their already damaged credit score will only lead to refusal and further credit damage?
The answer for millions could lie with the online lenders as when it comes to making ends meet and steering clear of all credit issues, there really is no better alternative. Using a lender from our select panel when it matters most allows a person to effectively rule out any redundant applications with major lenders and the refusals they will of course offer. In addition, the cash from a payday loan makes the ideal solution to a thousand and one everyday cash emergencies which themselves can lead to credit score damage, such as a missed bill.
With a careful approach a decent level of common sense, it is perfectly possible to put Internet available loans to work for you.
Should you use a payday service to fund your company?
Quite simply, No! Payday loans are not designed for any type of long-term or non-emergency use.
That being said one of the major reasons why people struggle during their first year of business is that banks are unwilling to provide loans. Self-employment is seen as a big risk, and banks expect clients to have a stable source of income. Even if the business is making a healthy income of hundreds of pounds a week, banks still regard working for yourself as the worst security, and for this reason are unwilling to lend to the self-employed. Stating your income will not carry any weight with the banks, particularly if you are holding stock, or receive payment in an irregular fashion. Many people working through the internet also do not have collateral, another serious problem when it comes to proving your income. Banks will also often look upon self-employment as only one step away from becoming unemployed, and this can be a serious problem when it comes to borrowing long-term loans.
Banks not lending the usual story
When banks won’t provide credit, one other source would be that of Internet loan sites. For the self-employed, even one day off work can spell disaster, and this is where a cash advance loan can really help. These loans are intended to cover you until your next payday, and for those with payments due from clients in the near future, this solution can be the perfect answer to your needs. A cash loan lender will not usually consider whether you are self-employed or otherwise, they only look at whether you can pay the loan back in good time. Even if you are not desperate for money now, you can still look at the possibility of taking out a payday loan in the future, as it is never too early to be prepared when you are self-employed.
But I have a poor credit rating…
Having a bad credit rating can really affect your chances of getting the amount that you want, at the interest rates you desire. In order to find a loan, people with bad credit will often borrow from lenders with a bad reputation, or at a very high repayment rate. This can make the opportunities for disasters, such as getting behind with payments, defaulting, or even having the loan passed to debt collection companies. In order to avoid these problems, borrowers need to remember some simple tips.
- Improve your Credit Score – As mentioned the best way to get loans without too many problems is to improve your credit rating. There are several ways that you can do this. You might choose to purchase a pre-paid cards, which can then be used to buy items in the same way as an ordinary credit card, once cash has been loaded onto it. Your history of careful payment can then be used to boost your credit score. A prepaid card doesn’t require a credit check, so if you are a UK resident, and over 18, you could get one of these cards.You could also repay a credit card in the same way to improve your credit rating.
- Do your research – Payday loans are another way of improving your credit score. Take out a small loan, somewhere between £50 and £150, and then pay it back within the time allowed for the loan. Even with bad credit, you can apply for a payday loan through the internet, and get the money you want within hours. Just like with any other type of loan, if you repay in ample time, this will help to improve your general credit rating.
- Manage Your Loan – As with all types of loans, you need to manage the loan carefully. Never take out more than you can afford. With a payday loan, small amounts such as £100 mean that you should be able to manage this sum. When you have the loan, use it wisely, so that you don’t end up short the following month. Then, when the loan falls due, pay it before the final repayment date, so that there is no delay while you are waiting for the cash to clear into your account. Even while you are spending the money, it makes good sense to keep one eye on the repayment date. Speedy repayment will benefit your credit score.