It is rarely advised to seek further credit to pay off existing debts; that is unless you can secure a lower rate of interest or more favourable terms. In most situations it can also prove to be extremely difficult, especially if you don’t have a particularly strong credit rating. However, despite this, it is still possible for anybody with a payday loan to use a conventional personal loan to repay it a little earlier.

So how would this work?

The most likely scenario is that you have found yourself in desperate need of cash and don’t have time to wait for a decision from the bank. As payday loans are often processed in under an hour, you can get a quick answer and have the money ready to spend by the close of play that day. Essentially it’s a more readily available form of credit, which is why many choose to borrow from short term lenders.

What are the likely issues?

Whenever you take out a loan or any other form of credit, that information will be shared amongst all lenders and should feature on your credit rating. As such, if you have recently taken one out and then seek a secondary loan elsewhere, this could make it very difficult to do so. In fact, unless your history is spotless and you don’t have debts on store or credit cards as well as large bank overdrafts, it may even prove to be impossible.
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