Who are Payday Loans for and are they Right for me?

A payday loan is a fairly new type of loan which is quick to arrange and lends small amounts of money. It is good to make sure you know what it is and how it works so that you can work out whether it is a loan that you should consider taking out.

How do the loans work?

So a payday loan will normally allow anyone to borrow hundreds of pounds, usually a maximum of a thousand. Therefore it is only suited for smaller purchases. It can be arranged very quickly as there is no credit check and customer services tend to be available all the time to get the loans arranged. This means that if you need money very quickly, this could be a good option for you. No credit check is carried out either. This is one of the reasons that the loan can be arranged so quickly. It means that the money is available to anyone that needs it very quickly.

The repayment of the loans tends to be different to a conventional loan. With a conventional loan there is usually a repayment plan where you will be required to repay a certain amount each month for a certain time period. With a payday loan the amount borrowed is small and therefore you are usually expected to repay it all in one go. This means that you will need to repay the full amount borrowed and the fees all together. This is set up so that a direct debit is put in your current account just after you are due to get paid so that there is a high chance that there will be enough money available to repay the loan.

Who are they designed for?

Payday loans were originally designed to help those with a poor credit record. As there are very few borrowing options available for anyone in this situation payday loan companies were set up so that they had a borrowing option. This is why there is no credit check done on a payday loan. The companies are taking on quite a risk by not doing a credit check. This means that they have to charge more money than those companies that do carry out one.

They can also arrange loans very quickly, sometimes within a few hours. This means that if you have an emergency where you need money very quickly, then they can help with this. If you have an overdraft or credit card, then getting money quickly is easier but if you have a poor credit record or have used up your credit limit on your overdraft and credit card, then you will find that it is a lot trickier to find the money and therefore a payday loan can help.

So the loans are predominately for anyone with a poor credit record that needs money quickly and has no other options available for them.

Are they right for me?

Deciding on whether it is right to take any loan is a tricky one. There are many things that it is important to think about. Firstly, all borrowing is expensive and so you should only use it if you have to. If you can wait for the money then it is best to do this. Use savings if you have any or wait until you next get paid if you can. Payday loans are expensive and so if you can borrow using a cheaper method then this is advisable. Whenever you are borrowing money you should always compare all methods to see which you think will be the best one for you.

You should also always consider the repayments. Find out how much they will be and when you will be expected to pay them. Then you will be able to work out whether you can afford them. To do this take a look at your past bank statements and see whether you would normally have enough money available to cover the repayment. If not, consider whether there are any changes that you can make which will enable you to be able to afford them. It is also important to compare loans to see which is the best. There are a lot of payday loan companies and if you can find one that is cheaper than the others but still provides what you are looking for then this could be a good option for you. Even if you are only saving a little bit of money it will make a difference. Therefore make sure that you always compare them.

So when you are deciding if they are right for you need to go through several thought stages. Decide whether you really need to borrow. Consider all your borrowing options and see which looks best price wise as well as being the most suitable for your needs. Compare loans of that type to see which looks best. Then make sure that you can afford to repay the loan.
Once you have been through this process you will be able to decide whether the payday loan is the right option for you.

How to Decide if you Should Borrow Money to Study

It can be a lot of fun to study and learn new things. It can also be something which could help us to improve in our job. Therefore many of us would really like to study. However, if we decide that we want to study for a degree, diploma or other courses there may be a cost associated with it. Some courses, such as GCSE’s can be fairly reasonable in price but if you want to do something at a higher level then the course will be much more expensive. You will also have to cover the costs of all of your expenses while you are studying rather than working. Therefore there are many things that you need to think about first.

What loan options are available?

If the course is reasonably cheap then you might be able to use your savings to pay for it and that would mean that you would not need a loan. It is worth checking to see if it would be affordable as borrowing money is always expensive and this would be a much cheaper way to study. To start with you need to see what loan options are available to you. If you are doing a degree for the first time then you should be able to get a student loan. If not then you might qualify for a career development loan. If you are not sure about your options then speak to the institution that you are studying with as they will have a finance department and will be ableto let youknow what the usual routes for borrowing are. It is better to get a student loan if you can, as these only have to be paid back once you are earning a certain amount of money and they are written off after thirty years so you may not end up repaying it all anyway.

Will I be able to repay it?

It is really worth making sure that you have a full understanding of the terms of the loan, particularly the repayments. You need to know how much you will need to repay and when. This will enable you to consider whether you think that you will be able to afford the repayments or not. There are many different options for borrowing and they will all have different terms with regards to repayments and so it will be important to make sure that you know what you will be expected to do. You will then be able to work out whether you think that you will be able to manage the repayments.

A student loan will not need to be repaid until the course has finished and once you reach a certain earning threshold. A career development loan will not need to be repaid until the course has finished but repayments have to be made even if you are not earning very much money. Therefore this will need to be considered when you are thinking about taking this sort of loan. There will also be terms if you take out a personal loan, use a credit card or an overdraft or any other means of borrowing. Make sure that you really understand the repayments and your obligations with regards to them so that you can decide whether you will be able to manage them.

Will the course improve my job prospects?

It is well worth thinking about whether the course will improve your opportunity for working. This is not quite so important for a student loan as you will not need to repay it if you do not get a well-paid job. However, the other courses will need to be repaid and so you will need to make sure that you have a high enough income to be able to afford it. Consider whether the qualification will allow you to be able to get a job that will pay you enough to be able to afford those repayments. Think about whether you could afford them at the moment as well. Some loans will need to be repaid right away, even while you are still studying. If you have a loan like this then you will need to think about how you will be able to afford the repayments while you are studying as well as after. It may be that you can study part time and pay for the course by working while you are studying. It may be that you have been able to save up money before starting the course so that you are able to manage the loan repayments using savings. If you do have savings though, it might be wiser to use them to pay for the course rather than getting a loan and repaying it with savings as this is a cheaper way to cover the cost.