There are lots of different opinions on payday loans and it can sometimes be difficult to know whether they are something that you should use or not. Like all loans it is really important to make the decision carefully because there are consequences, both good and bad of taking out a loan. Of course, having access to the extra money is probably the main advantage of every loan, but there are things that you should think about to make sure that it is a good idea for you to use one.
Cost
it is good to start by considering the cost of the loan. Of course, all loans have a cost of some sort as does everything that we buy and you need to think hard about whether you think that the cost is an amount that you are happy to pay. You will need to therefore find out how much the loan will cost. Some people will just look at the interest rate, but this is not a good way to find out how much a loan costs. This is because the amount of interest that we are charged is not only determined by the interest rate but also by how long we have the loan for and whether there are any additional fees on top of the interest. It is therefore a good idea to contact the lender and find out exactly how much it will cost. You will then be able to think about whether you feel that the cost is reasonable or whether you think that it is okay. Consider that you will be paying this on top pf the item that you are buying with the money and so you need to think whether you feel that this will be worth it or not.
Repayments
It is extremely important to also find out about the repayments. You want to be able to make sure that you can afford these and so you need to know what they will be. With a payday loan the repayments will generally be in a lump sum which you repay on your next pay day. This means that you will have a large repayment to make in one go and you therefore need to be careful and check that you will be able to repay it. So make sure that you find out from the lender exactly how much you will be expected to pay and when and then take a look at your bank statements to work out whether you will be able to afford this. It is a good idea to take a look at a few months worth and also think about whether it is likely that you will have any extra expenses in this particular month, that you will need to be aware of and allow for in your calculations. Make sure that note down how much you are being paid and how much you need to spend on essentials, to ensure that there will be enough money left to manage even after the large payment goes out.
Value for Money
It is also good to think about whether you feel that the loan will offer you good value for money. It is a good idea to consider what you are using the loan to pay for and whether you think that it will be worthwhile spending the money on this. It is not always that easy to work out, but one way you can do is to think about whether you would normally pay that much money on an item (the cost and the loan cost) and then you can decide if you feel it is worth paying for the loan to get the item. Also think about what you will get from paying out the money, how it benefit you are whether that will be worth it.
