What you need to consider before Applying for a Payday Loan

A payday loan can be extremely useful. However, depending on your circumstances, they may not be the right choice for you. Getting the right payday loan for you requires some consideration – think about the following before making any applications, to ensure you’re getting the right deal for you.

What is the money for?

Before you apply you need to know what you’re going to use the money for. Generic uses like “bills” aren’t good enough – you need to be specific. If you don’t have a very clear idea of what the money is for, it’ll be very easy to waste it, which won’t improve your financial situation at all.

How much do you need?

Knowing what the money is needed for will give you an idea of how much money you actually need. Borrow too little and you’ll still be in financial difficulty, unable to afford what you need. Borrow too much and you’ll be saddled with longer-term repayments and higher interest than you can actually manage.

What can you afford to repay?

It’s not enough to just need the money – you need to be able to pay it back. A payday lender will not lend to you if they are not satisfied you can comfortably make the repayments. If you get a loan you can’t repay you risk defaulting on it, which could result in repossession and black marks on your financial history.

Have you done your homework?

When choosing a payday lender it’s important to do some research – don’t rely on what you read on the website. Do a search to see if you can find any reviews from previous customers, to see the reality of their service. You should also check the lender is properly regulated and approved by the relevant financial bodies.

Do you know the risks?

Payday loans can be dangerous for customers who take them out without properly understanding the risks of non-repayment. Payday loans are designed to be a quick cash injection, not to solve ongoing financial difficulty. If you fail to pay, you could end up with even more debt, or the threat of legal action.