Payday loans can be controversial. There are some people who really dislike them and there have been calls for them to be banned. They have been regulated now in order to stop them being too expensive but they can still be dear. However, there are a lot of people that use them and are thankful for them being in existence although there are also people who have used them and found them to be a struggle. So it can be difficult to know whether they are something that you should take out and whether it is the right time for you to have one.
It is important to understand how these loans work before considering taking one out. Some of the people that struggle with them do not fully understand how they work and this can lead them into trouble. They are a bit different to regular loans in that you have to pay back the whole amount that you borrowed plus the interest in one lump sum. The date of repayment is agreed between you and the lender and will tend to fall on the day that you are paid, so that there is the money available to pay for it. As long as you make sure that there is enough money in the account when the payment goes out, then you will be able to pay it back in full and all will be fine. If you cannot pay it all back, as there is not enough money in the account to cover the payment, you will have additional charges added on which means that the debt will grow and will continue to do so until you do pay it back in full.
Therefore, you need to make sure that you are confident that there will be enough money in the account when the repayment is due. To do this you need to check a few things. You need to know how much you will be paid after tax and how many other bills you have coming out that day or before you next get paid. You will then be able to calculate how much money you should have and therefore know whether there will be enough to pay it off. If you are sure that there will be enough money, then this could be a good time for the payday loan, but if you will not have enough money, then you should not take the loan or you should borrow a smaller amount. It is important to think about what might happen if there are more unexpected expenses that come along before you are de to repay the loan and how you will manage them. If this is likely to happen then you may not then have enough money to pay the loan back.
Like all loans, you should only take a payday loan out when you need money in an emergency. Loans cost money and so they may help in the short term, but in the long term we will end up paying out even more money, so you need to be sure that you will be able to afford to do that and that you are happy with paying that extra. Think about whether you really need the money before you borrow. Consider whether you can wait until you get paid, whether you have any savings you can use or whether there are any other ways of making money, such as selling some things or getting an advance on your salary. Think about the cost of the loan and whether you think that it will be worth paying that extra money. Normally people who have an emergency and really need the money will think that it is worth it, but if what you are using it for is not an emergency, then it could be wise to avoid borrowing the money.
So thinking about whether it is the right time for a payday loan is important. Make sure that you really need the money and that there are no other ways to get it. Also think about other types of lending and compare rates, both between different loans as well as different payday loan providers to make sure that you have got the best deal. It is most important to make sure that you will have the money available to repay the loan as well. If you are not sure that ou will, then it will a big risk taking out a loan like this.