Payday loans are viewed differently to other types of personal loans. These short-term products are regarded as “bad debt” by a lot of mortgage lenders. Many will disregard all applications made by people who have taken out a payday loan in the last 12 months. Some lenders will even decline a mortgage application if they see a short term loan on a credit file as far back as 6 years. However other lenders will take other factors into account such as your loan-to-value (LTV) ratio and if you have had any other credit issues in the past.