How Much will a Payday Loan Cost me?

If you are thinking of taking out a payday loan, one of the first question you might ask is how much will it cost. We tend to decide whether we are going to buy things or not based on the cost and so it is a perfectly legitimate question to ask. This is not a simple question as the price will vary depending on a number of factors.

  • What the lender charges – the amount a lender charges will depend on a number of factors. They will have costs and they will decide how much they are going to charge you based on this. Some lenders will just end up charging less than others and some will be more expensive. You may want to compare the costs of the different lenders so that you can find the one which you feel will offer you the best value for money. It is important to realise that it is not just the cost that is important when choosing a lender though. You need to be able to feel happy with them, trust them, feel they provide a good customer service and a loan which has terms that you are happy with.
  • How long you borrow for – As you will be charged interest daily on your payday loan, the longer you have the loan for, the more you will pay. This means that it is wise to work as hard as you can to keep your borrowing period as short as possible. If you can wait some time before you borrow, maybe even if it is just a few days, it will mean that the loan will be cheaper. Even saving just a little bit will make some difference and so it is worth it.
  • How much you borrow – Interest is calculated based on not just the amount of time that you borrow for but the amount that you borrow. The more money you borrow; the more expensive it will be to borrow it. This means that it is important to make sure that you borrow as little as possible. If you can, use savings and other money that you have before you borrow so that you do not have to borrow more than necessary. Also think about whether there is a cheaper alternative to what you are buying with the money which might mean that you can borrow less.
  • Whether you repay on time – it is important to make sure that you repay the loan when it is due. In some cases this just might not be possible, perhaps if you spend too much money before the loan payment is taken out or if your pay is not enough to cover or the pay arrives late. In any circumstance where you are not able to repay on time you will find that there will be additional charges to pay. These can significantly increase the cost of the loan. This means that it is really important to make sure that you do repay the loan on time. You need to look carefully at your finances and do everything you can to make sure that there will be enough money available. This will probably mean that you will need to budget and only spend money that is totally necessary. You might even need to think of some ways to earn more money so that you can afford it. Maybe you will be able to sell some things to get a bit of extra money or do some extra hours at work. It is worth thinking about what you might be able to do in case you are in the situation where you need to do this.

It is worth knowing that a lender will normally have a calculator on its website where you will be able to work out how much the loan will cost you. If you put in how much you want to borrow and how long for, it will tell you how much you will have to repay in full. If you take away the amount you are borrowing you will be able to calculate the cost of the loan. Once you have this figure, not only is it useful for comparing the cost with other lenders, but you will be able to use it to work out whether you think it offers you good value for money. Consider whether the item that you are buying with the loan is worth this extra cost that you will have to pay if you want to get it. Imagine the item you are buying costs its price plus the cost of the loan and think about whether you would buy it if it cost that much. It may be that it is an emergency purchase and you have no choice, but if it is not then think about whether you want to pay this much for it.

How to find the Payday Lender with the Best Reputation

There are a lot of payday lenders and if you are considering a payday loan then you might be rather daunted by trying to decide which of them will be the most suitable for you to use. There are many factors which could influence you in your decision as well. With most people, cost would be very important, but in such a competitive market there may not be huge cost differences between the different lenders. This means that it might be wise to look at other factors as well. One of these could be the reputation of the lender. Some people feel that they really want to use a lender with a good reputation so that they feel they can trust them better. Therefore, they will need to do some research to find out more about them and what others think of them.

  • Ask friends and family – asking the opinion of friends and family is one of the most useful things that you can do. This is because they will have no reason to be biased and they will want to help you. This means that they will be totally honest with you. Therefore, asking them whether they have had payday loans and what they thought of the lenders that they used is really important and can be extremely helpful. However, you may feel a bit awkward explaining to family and friends that you need a payday loan. For some people it will not matter, but for others, they will feel that they do not want to highlight that they are borrowing money. You may also find that you do not have any family or friends that have used a payday lender.
  • Ask colleagues – you may also find that asking colleagues is useful. You might be more prepared to tell them about borrowing money or they may have more experience of borrowing than your friends and family. Even if you have information from friends and family it is worth asking them as well as you might be able to get even more information. You could always just start a conversation about payday loans and see if anyone mentions they have tried one and then you will not actually have to mention that you are thinking of getting one.
  • Search lenders websites – it can also be wise to look at the websites of the lenders that you are choosing between. Although you won’t be able to find out what others think of them, it will give you more information about them which could be the most suitable for you. Finding out more about what they offer and details of the lender will give you more ideas about whether they will be the best lender for you or not.
  • Look at online finance sites– there are many online finance sites where people discuss things such as borrowing. You may find that some have message boards and forums where people discuss their experiences. These can be really useful as you will get personal accounts and you will be able to think about whether you feel you can trust a lender based on what others are saying about them. It can be a good idea to keep aware that these sites could be biased. It is very easy for rival lenders to write negative things about each other to try to get people to be put off them. They could also put positive things about themselves. Look at a selection of sites and this should help to reduce the chance of bias. Also try to use sites that you trust. You may find that people are more likely to say bad things about a lender than good. IF they have had a good experience they will not really have a reason for doing anything more, but if they have a bad experience they are more likely to make a fuss about it, perhaps to warn others or in the hope that the lender will compensate them. Therefore, it can look like all lenders are bad if you look at sites like this but it might just be the case of trying to find the one with the least amount of bad things said about it.
  • Review sites – there are sites which review lenders. These can be useful in identifying which lenders you have to choose form but you have to be careful with the reviews. Sites like this tend to earn commission on the leads they generate as a result of their reviews. This means that they are much more likely to give a positive review to a lender which will generate them more commission compared with one that will give them less or none at all. Therefore, you need to be cautious with sites like this and try to figure out whether they will be completely honest with you or whether there is a reason to think that they might be biased.