Is a Payday Loan Good for Someone who is Afraid of Debt?

There are many reasons for needing to borrow money, but there are some people that get really worried about borrowing money. This could be because they have been brought up to think that borrowing is bad or that they have got into trouble with borrowing before or something else. Whatever the reason, if they need to borrow money it may mean that they will find the whole situation rather stressful. There are some types of borrowing that are better for this sort of person than others. A payday loan can be really good for those afraid of debt as it has a number of features which could be helpful.

  • Low chance of being turned down – with a payday loan there is a very low chance that you will be turned down for the loan. Some people worry about borrowing money because they think that they will not be allowed to have a loan. As there is no credit check then it means that the loan is offered to many more people than a conventional loan. Being turned down for a loan is not only disheartening but it can have a negative impact on your credit record. Therefore, if you can choose a payday loan, where it is more likely that you will be accepted, it will mean that it will not have this negative impact. You will only need to fulfil a few criteria such as being resident in the UK, over 18, have a regular income and a current account. There are very few people that would not fulfil these criteria and so it is very likely that you would be eligible for a loan like this.
  • Repaid very quickly – some people worry about debt because they do not like to owe money for very long. With a payday loan this can be helped by the fact that the loan is repaid very quickly. It gets repaid when you next get paid, which means the maximum time that you will owe money for will be four weeks, but it is more likely to be just a few weeks. It will therefore not be very long at all before you will be debt free. The closer to your pay day that you borrow the money, the sooner it will be when it is paid off. You will often have the flexibility to repay it early if you are able to as well.
  • Not much paperwork – sometimes it is the amount of paperwork that has to be filled out which can make a loan stressful for some people. This is why it is good to know that this will not be the case with a payday loan. You might be able to apply over the telephone or online too, which means that you will be able to avoid doing any paperwork. It is good to check this out with the lender though as they all have different ways of doing things.
  • Quick to arrange – a payday loan can be arranged very quickly. This means that you will not have to be concerned with waiting around for a decision or for the money to arrive which can be a stressful process. With some lenders you may find that you have the money in your account within a few hours. This means that you will not have to spend lots of time worrying about whether you have been approved for the loan and whether the money will arrive in time.

It will depend on why you are afraid of debt as to whether payday loans will resolve this problem for you. However, it could be extremely useful and is worth considering as it is so different to other loans. The fact that most people get approved, the application process is quick and simple and the loan is repaid very quickly. All of these factors could be things that will make this type of loan more attractive than others. It is worth comparing the payday loan to other types of loans to see whether it feels like it would work better. It is important to be aware of how the loan works so that you are clear as to whether it really will suit you. It is also good to compare different payday lenders so that you can check out how they differ. The most obvious thing to compare is the cost and it is important that you are not paying more than necessary. However, it is also important to make sure that you are getting good value for money so look at other features of lenders as well such as how good their customer service is and things like this. It is worth thinking about what would be important to you in a good lender so that you can look for those features.

How do Payday Loan Repayments Work?

If you are considering a payday loan but have not had one before, then you might have all sorts of questions about it. One of the main ones might be about the repayment of the loan. This is because it is well-known that a payday loan is not repaid in the same way as other loans. It is good to have an understanding of how they work generally as well as how things work with the specific lender that you choose. It is really important to have a good understanding of this before you take on the loan so that you know what is expected of you and therefore can prepare and make sure that you have enough money.

When will the repayment be?

Firstly, it is important to make sure that you know when the repayment will be so that you can be prepared. The loan is repaid in one lump sum and so you will need to be well prepared. It should go out of your account on the day that you are paid and you will supply the date. Make sure that you note it down though so that you are prepared. It might be that you will forget once it is set up but it is important that you remember. You might think it will be easy to remember a sit is the day that you are paid, but if you are not always paid on the same date then it could be that you may not remember exactly when it will be and so it is important to note it down.

How to calculate how much the loan will cost

It is also important to know exactly how much you will need to repay. This will allow you to make careful decisions about what you are spending to make sure that you have enough money put by to pay for the loan. To calculate how much you will repay you should be able to use the calculator on the website of the lender. If you enter details of how much you are borrowing and how long for, this will calculate how much you will have to repay in full including any fees, charges and interest. If you find it tricky to do this then you should find that the customer service department ill be able to calculate it for you. Do not be tempted to guess or to forget that you have to repay charges as well as the amount that you borrowed as this could lead to you finding it tricky to repay the loan.

How to check if you can afford it

Once you know how much you will have to repay and when you have to repay it, you will be able to think about whether you can afford it. You might be tempted just to assume that it will be affordable for you without properly calculating. However, it is much better to actually look at the figures and work it out. Look back over the last few months and note down how much everything cost you and how much you earned. This will allow you to calculate whether you can afford the loan or not. It is wise to think about whether these were typical months and whether you may have a cheaper or more expensive time for the next few months. Also think about what spending was necessary and what was not, as this will allow you to prioritise spending and cut down to make sure that you can afford the loan.

How to plan for the future

It is wise to make sure that you plan as well when calculating how you will afford the loan. Also think about whether you will be able to manage the following month on less money once you have repaid the loan. Some people find they cannot cope and have to get another payday loan to manage and this sets a trend. Therefore, make sure that you have a plan before you take out the loan so that you can avoid this. It is wise to start by making sure that you are in well control of your spending and just buy necessities until you feel that you can manage again. If this still will not be enough then you may need to think of some ways to make some extra money so that you can cope such as selling things you no longer need or doing some extra work to earn some. There will be many ways that you can earn, but you will have to decide what fits in best with your lifestyle. It is good to plan carefully and try to aim to have more money that you need just in case something crops up and it turns out that you do need more. You will also feel better if you know that you are really well prepared.