Payday Loans: Prior Considerations

By: Liam G

Payday loans are an excellent means by which to obtain cash for any situation, with approval being both quick and easy.

The following are some of the important factors that should be taken into consideration prior to committing to a payday loan.

The actual amount deposited into your account may differ slightly from the loaned amount. This is likely to be down to the lenders charge, which covers things such as administration costs and the privilege of obtaining the loan.

This charge is usually is the region of ?20 to ?30 for every ?100 that is borrowed. This is either added to the loan amount or deducted. Either way, this should be clearly stated by the lender.

If the required funds are not available to the lender at the end of the term, usually 30 days after the loan was deposited, then you may be offered the option to "roll over" or renew the loan.

This usually involves the lender issuing a new loan, along with more charges, and now possible late fee's. It is therefore advisable to avoid such options, as this could result in falling into a "payday debt cycle", where multiple payday loans are taken out, and interest is incurred.

Ensuring that the required amounts are in your account prior to the end of the loan term can avoid all of the above issues, so it is highly advised that you should only take out a payday loan if you are certain you will be able to meet repayment in full.

If you are unsure on whether or not payday loans are the best option for you, then it's advisable to speak to an IFA (Independent Financial Advisor), who will be able to give you impartial guidance.

Payday Loans
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