If you are struggling for cash and need a quick fix of financial help to see you through the next few days or the next few weeks, a payday loan may look like an attractive proposition. It provides you with a quick and easy way to acquire money that can resolve a short-term issue, hitting your bank within 24-hours in some cases, and tiding you over until you next get paid by your employers. You should only ever take out a payday loan with a company that you can trust, and with a range of responsible lenders currently on the market this is easier than it has been in the past.
There are a few different considerations to make when looking at a payday loan however, and you should always look at all angles, and other alternatives before committing to taking on credit of any form.
Before you research different types of credit and different payday loan providers, first sit down with a pad and paper and work out your monthly expenses. Have on the page your exact incomings each month from your employment, and list your rent or mortgage, utility bills, broadband and phone bills, grocery bills, and all other monthly expenses. Work out whether you can afford to take out a loan of any kind and if you can, how much can you realistically afford to pay back each month? This can then form the basis of your search for credit.
It could be that you can find a better deal with a different type of credit to a payday loan. You might qualify for a larger loan to help you over a longer period of time, or be more suited to an overdraft with your current bank. Alternatively, a credit card with a promotional interest free period could be the best bet at this time for your financial needs. Always look at all options open to you before committing to anything.
Never take out a payday loan if you want to use it to pay off other loans, if you already have a payday loan with another provider, or if you are not certain you can afford to pay back the loan in time. Missed payments will only lead to extra fees and the potential for more financial trouble further down the line. Also, remember that there is a 14-day cooling off period with any financial product or service that you sign up to. All you would have to pay if you withdraw within this period is the interest on any credit you have already used.
If you are convinced that a payday loan is the correct option for you at this current time, always be aware of the small print and only work with payday loan lenders that have a proven track record, provide ample proof of trustworthiness and can help you out in the future should your personal and financial circumstances change. The last thing you want to do is owe money to a lender that is rigid and offers no scope for renegotiation, a freezing of interest, or a payment holiday should you lose your job for unforeseen reasons, become ill or injured, and cannot afford to keep up with the agreed repayments.
