If you are looking for a mortgage and you have a payday loan, you may find it difficult – but not impossible – to get approved for a mortgage. Let’s look at what payday loans are and why some mortgage lenders may decline your application if you have one of these loans.The attraction of payday loans
Payday loans are popular in some quarters because they offer the chance to borrow sums of between £50 and £2,000. The repayment period is short – typically the next month, or next payday, hence the name. Loans can be arranged at very short notice, invariably online.
Even if you have a poor credit rating, you may still be approved for a payday loan – and you rarely have to wait any time at all before receiving the cash.
No questions are asked about why you need to borrow the money and there is no restriction on how you choose to spend it.The drawbacks
According to a report by the Financial Ombudsman Service on the 12th of June 2020, …