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Will I get a loan with payday loans?

Payday loans, i.e. loans for a small amount and with a short repayment period that can be quickly and easily taken out via the Internet, are very popular among Poles. In themselves, they are nothing bad, on the contrary – they can often turn out to be very useful and even beneficial (especially in the case of free first payday loans for new customers). However, it should also be pointed out that sometimes having them can be problematic. For example, when we want to make another commitment. In that case, will I get a loan with payday loans?

How payday loans affect creditworthiness?

Before answering the question of whether I will get a loan with payday loans, it is worth considering the topic of creditworthiness and the impact of payday loans on it. After all, too low creditworthiness, i.e. the ability to timely repay all a given debt, is one of the most common reasons for banks to reject loan applications. Many factors affect your creditworthiness, including:

  • the amount and form of earning income
  • the number and amount of liabilities held
  • credit history
  • the number of people we have dependents.

Each bank uses slightly different algorithms to calculate creditworthiness, so a negative decision in one bank does not have to mean that all others will also refuse to grant us a loan. Anyway, in the context of payday loans, the second point is very important, i.e. the number and amount of liabilities.

Not all loan companies enter their loans into  BIK, so banks will not necessarily find out about their payday loans in this way. However, we can expect questions about currently repaid debts, including non-bank debts, on the loan application.

Obviously, the higher the debts, including payday loans, the lower the creditworthiness. Giving a loan to a person who is already seriously indebted is risky – it may turn out that other, more priority obligations will drain the home budget and prevent the timely repayment of the new debt.

Especially when it comes to mortgage loans, the installments of which are usually very high (depending on the bank, we can get a mortgage with an installment of up to 50% or 70% of our monthly income, although other debts currently paid are very important here).

Can you get a loan with payday loans?

We already know that payday loans, as well as all other types of financial obligations, hurt creditworthiness, and therefore also on the chances of getting a loan. However, will I get a loan with payday loans, or do they completely exclude this possibility?

The amount of our payday loans, as well as earnings, is very important here. If we borrowed a few hundred zlotys or several thousand, but we earn very well and we will be able to pay back the payday loan on time, it does not have to be a huge obstacle. It should be remembered that although payday loans repaid on time may be cheap or even completely free, exceeding the repayment date will generally involve severe financial penalties.

However, what if we do not earn the best and we have payday loans on our account? In such a situation, getting a loan will be much more difficult, although still not impossible. The help of an experienced credit broker who knows exactly where and who to turn to obtain a positive credit decision for the client can be invaluable.

What to do with payday loans to increase the chance of getting a loan?

If we have such an option, it is worth paying off the payday loans before applying for a loan. Thanks to this, the number and amount of liabilities currently held will decrease, and we may gain a positive entry in  BIK. However, people who plan to take out a loan often do not have the funds to do so. What can you do with payday loans to increase your chances of getting a loan?

A good solution can be the so-called consolidation of payday loans, i.e. combining them into one debt repaid in installments. Thanks to this, the amount of our debts is significantly reduced, and instead of several thousand to be repaid in a short time, we can spread the liability into convenient, easy-to-play installments. So it will be a beneficial operation not only financially, but mentally, it will also help us in terms of the chances of getting a bank loan.

However, it is worth pointing out that consolidating payday loans on your own is not easy, especially if you want to do it with a bank consolidation loan. In such a situation, you may need to use the help of a good credit broker mentioned above.

Will I get a loan with payday loans – summary

As you can see, the mere possession of payday loans does not have to automatically mean a refusal to grant a loan – it also depends on many other factors, such as the amount of income. After all, it cannot be denied that payday loans hurt creditworthiness, so it may be a good idea to pay them off or consolidate them before applying for a loan.