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Can You Take Out A Payday Loan With A CCJ?

If you have been looking for a loan but have found yourself rejected, this could be for a number of reasons. Maybe you have had previous debt problems, have an adverse credit history or a low credit score due to not having borrowed much in the past. One of the major reasons that many people find that they are turned down for traditional credit such as high street bank loans is the presence of a County Court Judgement (CCJ) on their credit file. If you have a CCJ and are looking for a loan they we take a look at what CCJs are and whether they affect whether you can get a payday loan.

What Is a CCJ?

If you have a CCJ against you, this is a County Court Judgement that will have been issued against you for the failure to pay money to someone that you owe. When you have been given a CCJ it will remain on the register for six years. If you pay it within this time, it will be marked as ‘satisfied’.

Every year, thousands of people in the UK get into serious difficulties with debt and the latest statistics indicate that County Court Judgments are more common than may people may realise. The latest statistics from The Money Charity indicate that an average of 2489 consumer County Court Judgements are issued every day in the UK with an average value of £1642. That means if you have a CCJ against you, you’re not alone.

How Do CCJs Affect Your Credit Rating?

If you have an outstanding County Court Judgement on your record then it will almost certainly have a negative impact on your credit rating. This is because it says to potential lenders that you have mishandled money in the past and failed to pay it back as required. Therefore, many, if not most high street lenders will automatically turn down any applications for credit. You may have got into debt and missed payments due to understandable reasons such as illness, losing your job or having to look after an ill family member. Unfortunately the reasons behind a CCJ don’t matter, just its presence. You may also have satisfied your CCJ by paying it off. You may think that this may immediately repair your credit rating but this is not the case and it may take several years to recover from a CCJ on your credit file.

Are Payday Loans An Alternative For People With County Court Judgements?

Yes they can be. Of course, all circumstances are different so there is no definitive answer  but we can certainly say that someone with a County Court Judgement against their name have a much better chance of being accepted for a payday loan than they do a traditional loan from a bank. Payday loans are very similar to any other form of loan but are easier to secure for someone with a CCJ because:

 

  • They are usually for small amounts
  • The borrower only has to commit to one repayment
  • They lend on different criteria to traditional high street lenders such as affordability
  • They charge higher interest rates because it is deemed a ‘riskier loan’.

If you are not looking to borrow a large amount of money and can afford to repay what you are looking to borrow, then payday loans can be the perfect solution for people who have CCJs against their name and can also play a part in rebuilding credit profiles.

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