A payday loan can come as a last resort especially in financial difficulties. When your rent is due in a week and you have bills to pay on top of that, a pearl of sweat rolls off your brow as you try to make the numbers work – several times over – but to no avail.
You could go down several routes that could get you some of the money needed to cover you until next month; maybe you host a yard sale, list some of your items on eBay, Craigslist, or take on some extra hours at work; none of which you really want to do, but you don’t really have a choice – because you need the money by the end of this week.
Reluctantly; you jump onto your laptop – and then you get off it realising you can’t jump on a laptop to switch it on – you flip the laptops display up and log into Google. Instantly, you become bombarded by thousands of short term payday loan websites – by this point; you are already overwhelmed by the outgoings due at the end of this week.
All the fancy jargon on these payday sites is confusing and they all seem to be offering you; the best rates, prices and deals. With just one week left to get your finances in order, you suddenly realize that, you have no idea what you are actually looking for.
Have no fear; here are 5 things you should do before you take out a fast payday loan. Being able to pay it back is your top priority and not letting the worry of repayments take root in your every day life – with our foresight, you will soon have the confidence and knowledge to find what’s right for you.
#1). Plan the payday loan repayments
Most short term lenders will have you paying back in monthly intervals – so you should probably make a plan of what specific luxuries you can cut back on to account for your additional outgoings. Different lenders provide you with different ways to repay the money back; some lenders offer you a couple of choices and the first choice is; setting up a direct debit – this is the most common type of repayment method, but there are others.
Alternatively, another option is to set up a direct debit authorisation – whereby regular withdrawals will be made on a set date – which can sometimes be a better choice as you can keep your debit notes for your own record; in case of an error or dispute in any given payment.
A standard direct debit will take out your funds automatically; this makes it harder to track debit notes and can often mean you get footed with the transaction fees, which can lead to the inability to initiate, future direct debits.
#2). Shop around for a better payday loan offer
Comparing the various APR’s of different websites is valuable – sometimes you get a marginally lower APR that, seems great, but one that has significantly higher monthly repayments; be cautious when you find a really low APR and make sure you understand that you will be making monthly repayments, plus the interest.
“We are the best payday loan company in the world” but is that really true? Don’t trust website testimonials unless you are certain it’s from someone who has borrowed from the company you are looking at. You need to see if they were happy with the service and advice given to them, and did they manage to make their repayment in time?
To make a more informed judgment on your choice of company visit their associated forums to make sure testimonials aren’t phoney; it’s handy to browse around and see if their customers have been offered extensions. Having this assurance – in case of unplanned events or emergencies –shows greater flexibility, this is what you need to look for.
#3). Always remember payday loan is a short term lending
#4). Payday loan management tools
The main goal you should keep in mind; will be finding a payday loan company that, gives you free advice and information on the management and repayment of your loan – anything extra lenders offer you, like interactive tools, a budget calculator or an interactive financial planner, will be a huge bonus if you are not comfortable with your finances.
#5). Budget accordingly
If you normally buy mainstream brands – and if you are like me and have a vice for Yorkshire tea – it’s time to say hello to super market own brands! Don’t be despondent about this, based on experience you may actually find that you like certain cheaper brands and best of all, you save money when you brand swap.
You may enjoy a fine red wine with some cheese on the weekend, but that’s no go for the next month; no luxury items allowed – become disciplined at doing this and you will reap the rewards. Try to pose yourself questions; what else do you enjoy that you could do without this month? If its spring time and you still have the heating on, you may want to consider putting an extra layer of clothing on instead, to save on household bills. Could you somehow streamline your morning bathroom schedule, as the less water you use this month, will mean more money at the end of the month.
It’s important to re-stress that short-term loans are not a long-term financial solution – if you are worried about making your repayments; get in contact with your lender and give them a heads up before the month comes to an end. In most cases, you should be able to get an extension; if you have stuck to your budget and been fiscally smart there is no reason why you should have additional expenses on top of your loan.
Always seek advice and keep all parties involved, in the loop, one of the most common mistakes we see is that; people leave it until a few days before their repayment is due, to announce that they cannot make it – communicating effectively with your lender and keeping your budget on track will be crucial in successfully repaying your loan.
