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How Often Should you get a Payday Loan?

Payday loans are something which some people use frequently and other people use rarely, but you may wonder how often you should get them. It is worth thinking about this as when you are in a situation when you need one, you may not spend enough time thinking about it as you could be panicking about needing the money quickly.

Giving a time scale on how often you should borrow is difficult as it will depend on your own personal situation as to when you may need to borrow money and when you can manage without borrowing. However, below are a few guidelines to consider when thinking about when you should be thinking about a loan and when you should not.

Try to avoid several loans at once

Lenders are not allowed to let one person have more than one payday loan with them at a time. This is because they realise that it makes it very difficult to repay the loan, if you have several to repay. However, you may be able to go to several lenders and get several loans as they may not check to see what other loans you have. However, this is not a wise idea. It will make it very hard for you to find the money to repay the loan, as you will have two lump sums to find.

You may be confident that you will have the money available to pay the loan when it is due. However, it is wise to consider what might happen once you have paid them. How will you manage to pay for everything else that you need until the end of the month or until you next get paid? Think about what other things you will need to pay for and how you will be able to afford them. It may be that you will be able to cut back and manage, but if you have essential bills to pay, such as utilities or need to buy food or pay for transport to work, then it is not easy to go without. In this situation it can be tempting to then get another loan to help and then you can end up getting loan after loan and getting into a real debt problem. This is why it is so important to make sure that you have a manageable amount of debt.
Make sure previous loans are repaid and you are managing again

When you have paid back a loan, you may then relax and think that you do not have to worry about spending. However, it is really important to make sure that you have got back on track with all of your spending before you relax too much and especially before you consider taking out another loan. It is a good idea to make sure that you are on top of all of your bills and feel that you are managing to be able to afford everything that you need first. Then you know that you will be able to cope with repaying a loan when you need to.
A loan should only be used in an emergency anyway, to help you out when you suddenly need money. This means that you should not really be considering one unless you run out of money and need to buy something quickly. Try hard to manage your money so that you do not get in this situation and then if it does happen, you should be well organised and in a good position to repay it and manage afterwards as well.

Make sure you can repay

When you are considering a loan with Omacl.co.uk it is sensible to think about how you will manage to repay it. It can be easy to just think about how the loan will help you through your current problems and ignore the fact that you will have to find the money to pay it back. With a payday loan, you do not have long before you have to repay it either, which means that you will not have much time to think about whether you can earn more money or if you can sell things to get a bit more to pay towards it. Therefore you need to think about whether you will be able to afford that repayment before you take out the loan.

It can feel that a loan will be a great solution to helping you out of a tight spot and that is exactly what they are designed for. They can be a great saviour to many, but only if they are handled properly. Make sure that you are prepared for the fact that you will have to repay the loan and that you will also need to then pay all of your other bills and buy everything else that you need after you have paid it off. For some people this will be fine, but others may struggle and so will need to plan carefully. Consider whether there are things that you can stop buying so that you save money and things that you can perhaps manage without just for a short term to help you to manage. There are different things that you could try to do, ask companies to let you pay things a bit later, get an advance on your salary, try to work some extra hours, or sell a few things, that could all add up to help you to manage the loan and easily repay it an cope until you next get paid.

So how often you get a payday loan really depends on whether you can cope with getting one. Think about whether it really is an emergency that you need it for or whether you can wait until you are paid to get the extra money. Think about your other debts and spending commitments and also how good your finances are at this particular time. There is a lot to think about but it is worth it as you will be able to cope better financially as a result.

Costs

How much should you be prepared to pay for a Payday Loan?

All loans cost money and payday loans do have a reputation for being expensive. However, they do provide a service which is vital to some borrowers, particularly those with poor credit records or people who need money really quickly. It is worth thinking about the cost though and how much you are prepared to pay for the loan.

Initial Cost

When you go to a payday lenders website you will find a calculator that you can use to see how much a loan will cost you. This can be extremely useful, both to allow you to see how much you will need to repay as well as being able to compare lenders to see who is the cheapest. They have to put an equivalent APR cost on their website and that is usually a huge and scary figure but this can be very misleading. The figure basically shows what you would pay if you borrowed the money for a year, but you will only be borrowing for a few weeks normally. It is much better to see how much you will actually be paying back in pounds. Then you can work out how much it costs. It is easy to take away the amount that you are borrowing from the total you are repaying, to work out how much you are being charged for the loan.

Late Repayment Cost

Sometimes there will be an occasion when someone is unable to repay their loan when it is due. This can happen for all sorts of reasons and is common with all types of loans. A payday loan is set up to try to make this less likely. A direct debit is set up for the repayment on the day that you get paid and this means that you will not forget to make the payment and you will be most likely to have enough money to repay it. However, there is a chance, of course, that other bills will go out first or you may have an overdraft that gets repaid automatically and so there is not enough money to cover the loan. In this case you will be charged extra money. The way that tis charge works and how much it costs will depend on the particular loan. It can be a percentage, a fee per day the money is outstanding or a combination of interest and fees. However, there are tight rules in the UK on payday lenders and they cannot charge above a certain ceiling. This means that once the charges for the loan reach a certain point, they cannot charge any more. At the moment this limit is set to the amount borrowed. Which means that if you borrow £100, you can never be charged more than £100 in interest and fees, this means that the maximum you will have to repay for that specific loan will be £200 altogether.

Total Costs

Obviously no one wants to pay out more than they have to for anything. This means that by making sure that you pay your loan back on time, you will ensure that you only pay the minimum charges. However, whether those charges or any additional ones are how much you should be prepared to pay very much depends on your own personal viewpoint. The money that you are borrowing will be being used for something. The value on that thing that you are using it for, will be determined not just by its cost, but also how much it is worth to you. For example, if you are paying an electric bill which means that you will not be cut off and therefore able to keep your family warm and you can cook meals for them, this can be worth a lot to you and them.

It is good to think about whether you think the thing that you are paying for is worth that extra money. There are a lot of considerations such as how much it is worth for you. Think about if that item was actually priced at the amount you will be paying for loan and whether you would still pay that price for it. Then you can decide whether it is worth that extra money.

With a loan it can be complicated though as there could be some stress associated with borrowing and also some hassle in finding the money to repay it. You need to think about the cost of that as well. Is it worth it? It will depend on you as well. Some people worry a lot and this can make them feel stressed. Others use their worry to help them to organise and plan things so that they are well prepared and do not get so stressed. It can be wise to make sure that you plan as well. Think about when the loan needs to be repaid and how you will manage to do that. Consider how you will manage financially once it is paid to cover the bills for the rest of the month. If you have a good plan, that you know that you can stick to, then there will no need to get worried and stressed and so this will not be an issue that you have to consider.

If you think that the cost of a payday loan is too high, then you will need to find an alternative to one. This may not be easy if you need money quickly or if you have a poor credit record. However, it is a good test to see whether the item that you are using the loan for is really necessary. If you can wait a bit longer for it, perhaps until you get paid, then it just shows that it was not a real emergency and you could cope for a while without the money. However, if you really do need the money and think the loan is expensive, then compare different lenders as you may find one that is cheaper and therefore more affordable.

Loans

How Long Should I have a Payday Loan for?

When you take out any loan, you will be charged for every day that you have that loan until it is repaid in full. This means that the less time that you have the loan for, the cheaper it is and therefore it is best to repay it as soon as you can. Sometimes there are early repayment fees though and these can make it more expensive to repay the loan, but these tend not to be applied to payday loans, so you can usually repay them early with no fee and therefore save money. It is always worth checking though, whenever you plan on repaying a loan early, to make sure that there is no fee to do so. Choosing when you take out the loan can also help to keep it cheaper and having a shorter repayment loan can also be cheaper but can have risks.

Choosing When to Apply

With a payday loan, you will usually borrow the money until you next get paid. As interest tends to be calculated daily; the closer you are to your pay day; the cheaper the loan will be as you will be borrowing money for less days. This means that if you delay getting the loan as long as possible, then it will be cheaper as you will have the loan for less time. As the loans are quick to arrange, you can leave applying for one until you just cannot manage without the money anymore and this should allow you to only keep it for the shortest possible time and therefore pay the minimum amount of interest on it. Do find out how long the payday loans take to arrange though, most only take a few hours but some could be longer, so it is best to be sure. So if you are considering a payday loan, do some research and pick the one that you want, but do not apply until you are absolutely sure that you are ready for the loan and then you might be able to save a significant chunk of money. Even delaying for a few days could save you quite a bit and will make it easier to repay.

Repaying Early

If you can possibly repay early then you will be reducing the length of the loan and therefore the cost of it. However, you do need to check with the lender in case there is a charge for this. Many loans do have an early repayment fee and it can be really high. They put these in to make it harder for you to switch lenders and they are common on large loans like mortgages. However, they are unlikely to appear on payday loans, but it is wise to check. Contact the lender and ask them about it so that you know for sure whether it is worth paying back early or not.
Even if you cannot repay the entire loan early, it can be worth repaying part of it. This is because the interest is based on the amount that you have borrowed, so the lower the amount owed; the lower the interest charges. So if you do find that you have some money available, then use them to repay the loan or some of the loan and you will find that you can save money.

Late Repayment

If you repay late, then there will be extra charges and so you want to avoid doing this if you can. As well as being charged interest for longer you will be charged a fee as well and so this can be expensive. It is therefore worth coming up with a plan that will enable you to ensure you are able to repay the loan on time so that you can pay the least amount possible for it.

It is well worth having a plan in place to help you make the repayment on time. This could be to make sure that you keep spending to a minimum leading up to the repayment date, that you try to earn a little extra to help towards it or that you sell some things that you own to make money that you can put towards it. Make sure that you only spend on essentials and you take up every opportunity to earn extra money and you should be well set. Whatever your plan, anything that can help you to balance the budget more easily will be well worth it as it will give you a better chance of paying the loan back more quickly which will save you money.

Longer Repayment Terms

Although most payday loans are organised to be repaid in full when you next are due to get paid, there are some available now that have a longer repayment term. This means that you will not just pay one lump sum, but spread the payments over a few months. This will be more expensive and so you could be tempted to just reject the idea. However, it is worth considering this if you think that you will struggle to raise enough money to pay back the lump sum as otherwise you could face a late repayment charge which will be even more expensive. Even if you are able to pay off the lump sum, there is a chance that you will find it difficult to manage your money for the rest of the month. Trying to make it stretch when a large lump sum has gone out neat to the beginning of the month could be really tricky. So again, paying a bit more to spread the payments across several months could be worth it. If you consider how well off you tend to be each month and how much spare money you have available, it will give you an idea of how well you are likely to manage with less money. If you know that it will be really tight, then it could be worth spreading the loan repayments out to reduce the burden. Paying more for the loan could be worth it if it makes it more manageable.

Conclusion

So you can see that by limiting the length of your loan it would usually be cheaper. This means that you should take out the loan as late as possible so that it is as close as it can be to your pay day and therefore you do not have it for long. If you can repay it early, as long as there is no fee, so that you can save money on interest. Make sure that you do not pay it back later than the agreed date or else it will get very expensive.