There are lots of different reasons that we might want to borrow some money. If you are looking for money to pay your rent, for example, you might consider all sorts of different types of loans. This can be a handy thing to do as you need to make sure that you are picking the one that is the most suitable, both for the purpose that you want the money for but also for you and the situation that you are in. If you are considering a payday loan, there are some things that you need to be aware of.
- How much you can borrow – it is good to start by checking how much you will able to borrow. You will find that you have an option of normally borrowing between £100 to £1000 with a typical payday loan. However, this will vary between lenders. You may also find that you will not be able to borrow this much money if you are a first time borrower. This is because some lenders will want to make sure that you are capable of repaying a small amount before they are happy to lend you more. As they will lend to you even if you do not have a good borrowing history this is a risk for them and they may only want to take on a small risk to start with. This will vary between lenders though and so you will need to compare them and check whether you will be able to borrow the money that you need.
- The repayment – it is also extremely wise to take a look to see how you will need to repay. Normally with a payday loan you will need to repay everything you have borrowed plus the interest and fees or charges in one lump sum. It is a really good idea to find out exactly how much this sum will be. Working it out can be tricky, especially trying to calculate the interest and finding out what fees there might be as well. However, you will find that many lenders will have a calculator on their website whether you will be able to find that out. You will also be able to ask the lender to work it out for you so that you can decide whether this is an amount that you can afford before you take out the loan. Make sure that you check carefully and think about any money that you will need to spend in the near future and calculate whether you will have enough money to repay the loan and cover the cost of all of the other things that you need to buy. If you will not manage it then consider whether you can spend less money in some areas and earn more so that you can have what you need available to repay.
- Your alternatives – it is wise to also think about what alternatives you have before you take out the loan. Firstly, think about whether you have any savings that you can use. Also consider whether there are nay ways that you can earn extra money to cover the cost. Then look at alternative loans. Lastly, compare lenders so that you make sure that you are getting the loan which gives you the best value for money. It will take time to do all of this research but it will be well worth it because you will have much better solution for paying your rent and you will be confident that you made the right decision for you and will know that you will be able to cope in that situation.