If you need a loan then you may wonder whether a payday loan will be an option for you. There are lots of loans and other options which could be beneficial to you and it is worth comparing them in order to think about which will be the best. One option, a payday loan, might be something that you know less about. As they are relatively new, if you have not used one before then it is likely that you will not have a big knowledge of them. It is worth finding out more about them so that you can decide whether they are something which will help you. Below are a few basics but it is worth doing a lot more research if you decide that you feel they are the right option for you.
How much can I borrow?
A payday loan is unlike other loans because they lend smaller amounts. This is really handy for those that only want to borrow a small amount and do not want to feel forced into borrowing more than they need. However, if you do need a large amount, perhaps more than £1,000 then you will have to look for a different type of loan. You may also find that if you are a first-time borrower then you will not be allowed to borrow very much. Lenders can be cautious and may want you to repay a small loan first, before they are willing to lend you higher amounts. This is because payday lenders do not do a credit check and so need to find another way to build up trust with their customers.
Who can use them?
As they do no credit check, payday loans are available to a lot more people than lenders that do one. This means that many more people can use them. There are actually very few restrictions. You must not be a minor, you must be a US resident, you must have a regular income and a checking account. The is normally all the criteria you need in order to borrow money from a payday lender. This means that it is very likely that you will be able to have one if you decide that it is the right option for you.
How are they repaid?
It is worth understanding how payday loans are repaid as it is quite different to many other types of loan. The payday loan is repaid in one lump sum. This means that you have to find a lot of money all at once rather than repayments being spread out in instalments. This can be great for those that like getting their loans paid off early and do not like being in debt. It is important though to make sure that you will be able to afford the repayment. Check out how much it will be and think about whether you will have enough money for this repayment. You will be able to find out how much it will be by using the calculator on the lender’s website. You can check if you can afford it by looking back at your checking accounts statements. Also think about whether you will be able to manage all of your other expenses once you have repaid this loan. It is worth spending some time doing this calculation as if you cannot repay the loan you will have to pay extra fees and if you cannot manage once the loan is repaid you may need to get another one.
Are they right for me?
Deciding whether they are right for you does not just depend on the factors above, although you should consider them too. You need to think through what it is that you are expecting from a loan and decide whether the payday loan fits your criteria. You need to be sure that it will work for you. It is wise to also think about how much it will cost you and whether you feel that it will offer you good value for money. Then you will be able to compare the different lenders that offer payday loans and decide which one will be the most suitable for you. It is worth taking the time to do this research and the calculations as you might regret your decision if you do not. You want to be happy that you have made the right decision to get a loan, that you are using the best type of loan, the best lender and that you will be able to repay it. It can be hard to make these decisions with a clear head if you are panicking about needing money. It can be wise to see if you can get someone to help you who might be able to think more logically and absorb information better because they are not worrying about money like you are.