There are some people that fear payday loans and think that they are a bad thing. There are others that use them regularly and find them to be the best solution for their money concerns. However, there will be those that have used payday loans and find that they did not get on well with them. It is good to know though, that there are ways to use payday loans to ensure that you are getting the most out of them. Therefore taking full advantage of the service offered to help you in the best possible way.
Representative Example: £400 borrowed for 90 days. Total amount repayable is £561.92 in 3 monthly instalments of £187.31. Interest charged is £161.92, interest rate 161.9% (variable). Representative 305.9% APR. We are a broker not a lender. We don't charge fees. We don't sell your personal information.
There are different things that you can do to make sure that you are making the most out of your payday loan:
It is wise to look for the cheapest payday loan. This means that you will have to repay less in fees and interest. You will always have to repay the amount you have borrowed with some extra on top for the lender, but the lower you can get this extra to be, the better it is for you.
You may be able to compare prices using comparison websites, but they may not include everything that you need. It is wise to look yourself as well so if you use a website like this, look into more detail at the cheapest suggestions. It may be that they are only compared on interest rates and fees are not taken into account, for example.
It is also wise to take a look at the late repayment fees. These are something which all lenders charge if you do not repay the loan when necessary. A payday loan will normally be helpful in that they will set up a direct debit on your payday so that the money will go out automatically when required so it is harder to miss a repayment, but there is always a chance there will not be enough money in the account to cover it.
Some lenders will encourage you to take large loans or give you big credit limits so that you can borrow a lot of money. This could feel very freeing but actually it can lead to lots of expensive debt. For every bit that you borrow; you will have to repay it and more. This means that it is much cheaper to borrow less money. So make sure that when you arrange your payday loan that you only borrow the sum of money that you need and do not get tempted to borrow a bit extra.
If you repay on time then you will not be paying out any extra money in late repayment fees. It is good to make sure that you do this as it will keep the loan cheaper for you and make sure that the lender does not have more money off you than you expected them to.
It is really important that you budget well leading up to the loan repayment and afterwards too. You want to make sure that you have enough money to cover the repayment, but also that you do not run out afterwards. You will know how much you need to repay, but make sure that you also know how much you need to pay out for your bills and other expenses. Do your best to only spend money on necessities and wait to treat yourself once you know that everything you need has been paid for. If you do not do this there could be a risk that you will need to get out another loan to help you.
So it is wise to treat the payday loan as a service that you want to get the most out of. Make sure that you use it wisely and then it will look after you by giving you the money that you need. Do not borrow too much and repay it on time so that you can keep the costs down as well as making sure that you budget carefully so that you do not need another loan to cover your end of month costs.