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The term credit crunch is a worldwide household phrase.

How exactly do we define credit crunch?
This is the situation created when banks reduced their lending to each other hugely, as they were unsure about how much money they actually had. The knock on effect of this was more expensive mortgages and loans for the ordinary person.

On top of this lending institutions are tightening their criteria making it much harder to be accepted for a loan. For those who are accepted they may discover that there can be some hidden charges that increase the repayments.

A payday cash loan is an option if you need cash fast and short term. If you have not considered this as an option before, it is suitable for you if you are working and need to avail of some cash quickly and then you would repay it gradually out of your wages. A payday cash loan can also be suitable if you have a poor credit rating. If this is the case many lenders now dealing with tighter criteria will not accept your application.

If you are unsure about your credit rating there are agencies where you can check this, such as Experian and Equifax.
Your credit rating can be improved over time if you boost your track record by paying credit card bills and other outstanding payments. Payday loans can be a good solution also as they don't affect your credit rating. The demand for this form of borrowing has increased by 55% over the last year.

How does a payday cash loan work? Normally the amount you can take out will be between 80 to 800. They are sometimes used by people who would prefer to avoid becoming overdrawn at the bank and risk costly penalties. Many people use them if they cannot afford their monthly bills. You will need to be employed and over 18 years of age.

Your wage needs to be paid into your bank account and you should have a debit card on the same bank account. You can apply for the loan and receive it within hours. A payday loan is electronically transmitted and can even be cleared in your bank in minutes.

If you are self-employed you can apply for a payday loan. A self-employed applicant will need a cheque book with a cheque guarantee card. You can extend your loan if necessary at any time, but most organizations will require at least one working day notice. To repay your loan you can repay it at any time with a good company.

If you have a CCJ you can still qualify for a payday loan with some companies if you can satisfy them that you will have sufficient funds on your payday to repay. If you need to repay your payday loan in installments you can also do this by extending the loan.

What happens in the case of failing to repay a payday loan? It is best to extend your payday loan before running into this situation. However if you are with a good payday loan company you should inform them if you think you cannot repay and this will avoid legal collection procedures.

Learn more about this author, Jackie Bourke.
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