The term ‘payday loan’ may sound like a contradiction in terms, but the truth is that there are many people who use payday loans to get them through until their next pay day. Some do so because they have credit problems, and others simply see it as an option for quick money when they need it. Either way, there are some important things you should know if you decide to take out the good payday loan.
Payday loans are actually very similar to credit cards; in fact, they were originally designed to be used as short-term credit cards. It’s only now that they’re being used by more and more people to help them tide over cash flow issues. The key difference between these two types of borrowing is that with a credit card your debt can grow out of control, whereas with a payday loan your debt cannot exceed what you borrow. This means that if you don’t make any repayments on your loan, then the bank or lender will not charge you interest. However, it does mean that you’ll also face charges if you don’t clear your balance before your next payday.
A good payday loan usually lasts for 14 days – although this can vary depending on your personal situation. If you’re looking to borrow £100 for example, then you could sign up to a 12-week contract which would cost you £5 per week, or you could choose a 36-week contract which would cost you £2.50 per week. There are other forms of payday lending available as well. For example, one company offers a form of payday loan known as ‘payday-to-go’; this allows you to access up to £1,000 over a period of 21 weeks.
How much you can borrow depends on how much you earn, and whether you’ve got any other debts. The higher your income and the less you owe elsewhere, the bigger your payday loan is likely to be! That said, payday loans are expensive, so try to borrow money from other sources first. You might also want to consider getting a small loan from somewhere else, and using that to top up your payday loan amount. This way you won’t end up spending so much money on your own debt.
There are several different ways to apply for a payday loan. One of the easiest ones to find is probably via the internet, and you can often get a loan within minutes. In most cases, you’ll have to provide proof of identity, details about your employment history and salary, and a recent utility bill showing your address. Once you’ve completed all this information, you’ll receive a quote based on your circumstances. These quotes will give you a rough idea of how much you’ll need to pay back, and will tell you how long it will take you to pay off your loan. They’ll also show you how much interest you’ll pay if you don’t clear your balance before your next payday. If you accept this offer, you’ll then need to go ahead and agree to the conditions of your loan.
Once you’ve done this, you’ll either receive an advance on your account, or the money will be transferred directly into your chosen bank account. As soon as the money has been deposited into your account, you’ll have 28 days to pay it back. After 28 days, your account will be closed and the full amount will need to be repaid. If you don’t pay back the loan on time, you could then face further costs of late payment fees.
The good news is that if you fail to repay your payday loan in time, you will still be able to get another one. However, if you continue to miss payments, you will be charged increasing levels of interest. You will also no longer qualify for further advances. You’ll also be required to pay back any outstanding balance on a monthly basis. If you can’t afford to do this, then you may eventually be forced to sell something to raise the money.
It’s worth pointing out that even though you are paying back a payday loan each month, you shouldn’t think of yourself as constantly repaying someone else. A payday loan is a short-term loan and you should treat it as such. While you may feel bad at having borrowed the money, you shouldn’t let this stop you from taking out another one when you need it again. Most payday lenders will allow you to rollover your loan if you need to extend its duration. If you do, however, you’ll have to pay a fee for doing so.
If your payday loan doesn’t work for you, then you might want to look at other options. You could ask friends, family members or colleagues if they’d mind loaning you money instead. Another alternative is to speak to a local financial institution. They might be willing to lend you money at a lower rate than a payday lender and without needing to tie your hands behind your back.
Of course, there are always going to be risks associated with borrowing money, but if you’re prepared to take the necessary steps, then a payday loan could prove to be a useful tool for your finances. However, you should only ever borrow what you can afford to pay back, and never borrow more than you can really handle.
The higher your income and the less you own elsewhere, the bigger your payday loan is, with That said, payday loans are expensive, so try to borrow money from other sources first. You might also want to consider getting a small loan from somewhere and use that to get top up your payday loan amount. This way you will not end up spending so much money on your own debt.