You have found that you are in desperate need of some cash over the next few days or weeks due to an emergency situation. It could be that your car has broken down and is in the garage. You need it desperately back on the road to use for your work, but also to ensure that your family can get around. It would be a huge annoyance to be without it for a while, but you haven’t got any spare cash to pay the garage to fix the car. Your insurance will cover the cost eventually, but that might not be for some time, as these processes are often slow and cumbersome. What do you do in this situation?
A payday loan could be the perfect choice, as it allows you to pay for the car repairs now whilst you wait for the insurance to pay out (if you can claim on your insurance) or until you next get paid. If you are a couple of weeks away from getting paid next by your employer, you might lose more money by being without a car for that long.
The important this is to ensure that you are fully aware of your finances before committing to a loan of any kind. Make an extensive list of your incomings and outgoings each month and work out how much of a loan you can realistically afford to take out without getting into greater financial difficulty in the long-term.
This is where your choice of payday loan lender comes into play. One of the biggest things that you should look out for in a lender is one that offers both flexibility of repayment, but also has a clear line of communication open for its customers. Let’s look at both of these aspects.
The first relates to the repayment structure of a loan. Once you have worked out how much money you would like to borrow you should have access to an easy to use online calculator through your chosen lender. This allows you to clearly see how much money you are borrowing, but also a sliding scale of interest attached to your loan based on how long you would like to pay it back in full. For some people it makes sense to take out a payday loan that you pay back in one full payment after one month. This is perfectly fine, but for some people it might be better to look at an instalment loan. An instalment loan is paid back over several payments, between one month up to 6-months in most cases. This allows you to lower the monthly repayment you will be making back to the lender. However, it does mean that the overall amount you pay back is higher due to the longer period of interest accrued.
The second relates to communication, and you should choose a payday loan company that has a trustworthy and clear communication channel open to you. If your personal and financial situation changes after you take out a loan you must have confidence that you can speak to someone about your account immediately. This could be to pay off the loan quicker, to take a payment holiday, or to restructure the loan. It is important that your payday loan company offers you both of these as a priority, flexibility and good communication.