Payday Loan Lenders

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Information about Payday Loans and Payday Loan Lenders

There are loans out there in the financial market place that offer customers a short term way of borrowing and some of these finance types are known as a payday loan. Before any loan is applied for and then further taken out, a customer must have to ask themselves how much they have to borrow and then what type of loan they actually need. For example is it a traditional payday loan or another type of short term loan product; such as an instalment loan over a typically longer period. Another consideration on the part of the applicant would be the lender that has to be selected given there are many different options available within the short term loans market place. In this article I am going to explain about the different payday loan lenders available and how they can benefit some customers out there.

Some people may even ask what is a traditional payday loan? Well a payday loan is a relatively small amount which is borrowed and then typically paid back on the applicants next employment payday and as such, normally within a single monthly period. One of the main benefits of payday loans generally is they can look to accept applications for people with a less than clean credit history. This can be helpful when other major lenders or bank cannot provide their services. If a bank cannot accept a loan application then it will also be unlikely that a building society on the high street can.

Payday loans can also provide assistance for short term borrowing very quickly once the application is approved by the lender. Often the funds can be transferred to the approved customer by the end of the day and in some certain cases the customer can be paid within an hour; providing all the required checks are passed. For an applicant who has an emergency and as such needs cash quickly then these loans could offer a timely financial solution, however, using them for any long term financial fixes that may occur is not advisable. It may be best in these scenarios to possibly use a credit card or maybe an instalment loan which can be paid back over a much longer period if required.

If as a customer it becomes clear that a loan is no longer affordable for the agreed duration of the loan agreement then it is advisable to communicate openly with the lender in question. Failure to make repayments on any loan will always have severe negative consequences for the customer. Before any application is even looked at a customer should compare different sites to decide what the best loan out there is for that person at that particular time. This way a customer can easily compare interest rates, repayment terms and the different lender reviews to see which option is best. There are some companies where a good credit score is needed in order for the application to be accepted and funded, however this is not always the case so based on the history of that customer previously with other loans.

One of the best way to find the most suitable loan for your financial needs would be to search online for a comparison website and here customers can explore different interest rates for different lenders, allowing the opportunity to select ones with the most suitable repayment terms to help that person financially if needed. Here on these sites also you can check other people’s reviews and feedback on any financial lender in question. It is always important to consider these reviews as this can determine whether or not a customer can gain the best loan out there at that current time of selection. Trusting a lender could be deemed a risk, however, using these sites will nearly always benefit an applicant considering borrowing. I have found that two of the best comparison sites out there are Go compare and Compare the market so could be used before any new financial commitment.

How people budget for payday loans

Before anyone takes out a loan of any kind they need to make sure the loan is affordable for them to repay and they have to make sure this as missing loan repayments can nearly always lead to severe negative consequences for the person involved. To help them prevent payments being missed a customer can make sure that they ask themselves a few questions before they apply for finance. One such question is do they definitely need the loan in question and if so, how much realistically are they looking to borrow. They also must take the lender chosen into consideration, there are so many different lenders out there in the market place and they each offer different things to their customers and as with any product or service, there are likely a mixture of positive and negative factors. For me affordability is always very key to whether or not people should apply for a payday loan or other types of finance as this means understanding whether they have the ability to repay the debt. It is this which I am going to focus on during this article. People can budget for a payday loan to help them understanding as to whether the loan is affordable or not for them to obtain and then successfully manage.

A good way to budget would be for someone to understand what their spare/disposable income is for that month and then make sure they live within their financial means and not exceed that on a monthly basis. Disposable income is the amount of money left over once a consumer has paid for all their other financial commitments. A good way of understanding this amount would be for a person to carefully and in detail list all their financial incomings for a monthly period. This should include everything such as wages, any possible benefits due, any tax credits or other incomings that will be made available. After that has been summarised, from that amount then deduct all the monthly outgoing expenditure for that same time period. This should include items such as rent/mortgage repayments, other possible living expenses and any other contracts that cause money to be taken each month. After that calculation has been carefully completed then the customer will have their disposable income and that money within reason can be spent in whatever manner they require as it belongs to them and is therefore not tied up in any financial commitment. If someone spends over the amount then the other repayments due may suffer as a result and a payment could be possibly missed. The disposable income in the budget can then be split down to a weekly figure and then at least the person then knows what they are entitled to spend each week. That same income can be used when deciding if someone needs finance such as payday loans as they know now if they have a large amount of disposable income then the loan product can be comfortably affordable however, if it is of a low figure or simply does not cover any finance instalment then the loan should just not be considered any further.

The traditional payday loan product itself can be hard to budget for, this is typically an expensive way of borrowing money as it must be repaid in full within a single month, on the persons next available payday. The interest charged on any loan of course can vary dependant on the lender chosen and their standard interest rate but with a payday loan it will be charged at around £24.00 per £100.00 borrowed by the customer. Traditional Payday loans are not like instalment based loans in that the customer cannot spread and reduce their repayments over a set number of months. For example if someone borrows £500.00, the interest charged on the loan can be around £120.00 making £620.00 repayable on their next payday. This amount is high and for anyone to pay this on top of all their other financial bills may not be possible and borrowing more will just place their finances in a much worse position.

 

By Kieran Moulden