We are all ultimately responsible for how we spend our money and you should never take out a Payday Loan unless you’re 100% certain that you can repay it on time and in full. but what happens when you are thinking of getting a Payday Loan? Here’s our guide to what you need to know.
What is a Payday Loan?
Payday loans are short-term loans that are designed to be taken out over a short period of time. Typically they are advertised as a means to fund unexpected expenses or emergencies like fixing a boiler or repairing a car.
Which situations are not suitable for Payday Loans?
More and more people are using Payday loans to cover predictable everyday expenses, like their phone bills, rent, groceries and utility bills just to name a few. This shows that it is not a financial planning problem that they face but a problem of making ends meet. People are using payday loans for everyday recurring expenses, even more often than one-off emergency expenses, therefore making it easier to spiral into debt and spend longer in repaying your loan and affecting your future finances. Other situations that aren’t suitable for Payday Loans are using them to pay off other debts, luxury goods or treats including holidays and keeping balances a float.
How much should I borrow?
Depending on the lender, you can usually borrow between £50-£800 to be paid back over typically 1-30 days. Here at Wageme.com, Payday Loans can begin from as little as £50 to £750, with the repay period from 1 to 35 days.
If your borrow time is long, the more expensive the your total repayment will be.
Example: if you borrow £100 over 30 days, this would cost you £24 in interest due to our fixed interest rate at 292%pa, essentially 80p per day RAPR: 1,221.5%. Making your total repayment £124 at the end of those 30 days.
We advise that you set your repayment date on your next payday and repay in full to minimise the risk of falling into debt. Therefore, your payment period could be shorter than anticipated.
If you borrowed the same amount as the example above but for a shorter time period then your interest would be less.
Example: Borrowing £100 over 15 days, would cost you £12 in interest, which is still 80p per day RAPR: 1,221.5%. Making your total repayment £112 at the end of those 15 days.
All of our applications are done online, which is easy to fill and can be completed in under 6 minutes. Once your application has been approved your loan will be paid straight into your bank account, often within minutes of your application being approved.
The decision to borrow money is serious and as a borrower you should thoroughly understand your side of the transaction. Spend time to think about borrowing and being properly prepared will make the process easier and may improve your chances of getting the loan approved.
Being conservative and responsible in how your borrow can even help you to take control of your financial future. Borrowing for the right reasons and living up to your repayment responsibilities can also make borrowing a useful financial tool.