There’s no doubt that payday loans are incredibly helpful in several different circumstances. There are ways you can get caught out, though, especially with interest on repayments. Here are some helpful hints and tips to consider when taking out a short-term loan:
- Check you can repay it – any good short-term loan payday lender should check, before awarding you the money, that you are going to be able to pay it back on time, as well as being able to afford the interest. They should also be able to explain to you every little last detail about the loan, including the interest rates, what will happen if you don’t pay it back in time, and how you can pay it back early if you want to. You yourself should have a general idea as to whether you’ll be able to pay it back, so check with your employer as to how much you’ll be receiving in your next pay packet. That way, you can pre-empt if you’ll be able to afford the repayments or not.
- Know your way out – if you can no longer pay back a loan, and bear in mind that you will incur extra charges if you don’t repay it in the original agreed time frame, you will need to tell your bank at least a day before the payment is due to come out of your bank that you wish them to stop the payment.
- Know the costs – Make sure the lender tells you exactly how much you’ll be required to pay back, and by when. If you have everything organised beforehand, it’ll make it a hell of a lot easier to pay it back in the allotted time.
- Know the facts – short-term loans are only manageable if they are taken out over a maximum of 30 days, otherwise you start to incur extra charges that you may not be able to keep up with. Try your best not to extend the repayment on your loan, as this will leave you even more out of pocket, and may lead to serious financial difficulty.
- Know when a short-term loan is appropriate – if you just want £50 to take out on the town with you, or you see a pair of shoes for £150 that you really want, a short-term loan isn’t for you. They should only be taken out when it is absolutely necessary and essential, otherwise you may fall into bad money borrowing habits, leaving you in debt and with no way of getting out of it.
Above all, be sensible with your money! Never borrow more than you can afford, and check with the lender that you’ll be able to pay it back within the agreed time.