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.