There are many lenders these days that offer payday loans. However, a lot of people will not use a payday loan because they do not know what they can be used for. It is something which it is worth finding out about as you never know when it might be useful for you. You may feel that you will not be able to use it for what you need to buy, but you could be surprised at what you will actually be able to buy with it.
What are payday loans designed for?
Payday loans were first designed for those people that needed to borrow money but did not have a good enough credit record to be able to borrow money from a traditional lender. The lenders noticed that there were some people that were really desperate to borrow money but they had no borrowing options because traditional lenders turned them away as they had a poor credit record. It was also recognised that often this money was needed for emergency purchases and so the loans were organised so that they could get the money to those that needed it really quickly. Therefore, the loans are often able to be organised so that money is available within hours.
What can I buy with them?
There are no restrictions on what you can buy with the money raised through a payday loan. Some loans are designed for specific purchases such as mortgages but payday loans are not. You will be able to choose what you spend it on and the lender will not ask or check. However, you might be restricted in what you can buy with them because of the amount that you can borrow. Payday lenders tend to lend between £100 and £1000 which means that if you need a major purchase that is more expensive than this then it will not be suitable for you. It is also worth noting that if you have not used a particular payday lender before then they may not lend you a larger amount of money. They may want you to borrow just a small amount and then show that you can repay that before they allow you to borrow more. This can vary between lenders though and so it is worth checking before you apply.
Should I use them?
Whether you should use a payday loan or not is also a question that you might want to figure out. You might wonder whether you will be the right sort of person to use one but this is something that is probably not important. You should be thinking more about whether you need a loan, how much money you want and how quickly you will be able to repay it. This is because a payday loan has to be repaid on the day that you are paid. Therefore, you need to find a lump sum of money. Of course, as you have just been paid, it is more likely that you will have the funds available to repay it. However, you need to think about the fact that you might also need to pay out for a lot of other things as well. Things like rent, contracts, other loans repayments, utilities, food and other essentials. It is therefore well worth taking a look at your finances and making sure that you think that you are able to manage that repayment as well as everything else. If you are not sure how much the loan will cost in full then it is essential that you find out. You will probably find that there is a calculator on the lenders website where you will be able to work this out. You will be able to put in details of how much you are going to borrow and how long for and this will allow them to calculate how much you will need to repay in full. If you are not sure how to do this or cannot find the calculator then you should make sure that you contact the lender so that they can let you know.
It can be quite a personal decision as to whether you should use a loan like this. It is a good idea to think about whether you really need the money to star with. Find out how much you will have to repay and make sure that you are able to afford that. Then you should also look at the alternatives that you could use instead. It might eb that you have savings, that you have other loans options r things like that. It is always essential to look at all of the alternatives when you are considering any loan. This is because you want to make sure that you are doing the very best thing for you.