When Should I get a Payday Loan?

If you are considering getting a payday loan, then you may wonder when the best time is for you to take one out. It is good to understand that with this sort of loan you will usually pay a bit more because the lender takes more risk and so it is best to try to only take one out if you really need it. This high risk is because they will not do a credit check. You will also normally have to repay the loan in one lump sum and so you need to be aware of the costs of this. There are other things that you can do to reduce the cost or the risk of costs going up if you miss the repayment.

  • When there are no alternatives – as a payday loan tends to be dearer compared to some other ways of borrowing it is always wise to look at alternatives first. You will need to take a look at what other options there are available for the amount of money that you need. It is most likely that a credit card or overdraft will be the alternatives and if you have access to these then they could work out cheaper. You will need to investigate this though as if you have a large unauthorised overdraft for a significant period of time or choose to only repay the minimum on a credit card, they could work out dearer than a payday loan and you will have the stress of being in debt hanging over you for much longer.
  • Take it out as late as possible – With a payday loan you will repay it on the day that you get paid. So, the closer to your payday that you take it out the shorter the term of the loan. If the term is shorter then the interest will be lower and so this will save you money. So, the closer to your payday that you take out the loan, the cheaper it will be, so take it out as close to your next payday as possible. You may feel that you cannot delay, but think about whether you really need the money that quickly or not.
  • Ensure you will be able to repay it – you need to also find out how much you will be expected to repay on the loan. If the amount is too high and you know that you will not be able to afford to repay it, then it is not the right time to take out the loan. You need to be confident that you can repay it as if you cannot, you will have additional fees and charges which could be significant and make the loan very expensive. Consider how you will manage the repayment and whether you need to borrow less money or not borrow anything at all. If you think it will be okay if you cannot repay it then look at the fees that you will be charged in this circumstance and you may change your mind.
  • Make sure you can cover other costs too – it is also wise to make sure that you will be able to cover your other costs as well. You will have other commitments each month that you will have to pay such as your utility bills and rent. You will need to make sure that even when you have repaid the loan, that you will be able to afford these as well. Therefore, you will need to take a look at your checking account statement and find out what these payments are so that you can calculate whether you will have enough money.
  • For emergencies only – payday loans are designed to help out in emergencies and that is why they can be arranged so quickly. This does mean that you should decide whether what you are using them for really is an emergency. If you can wait for the money then take the opportunity to save up for it instead and you will find that you will pay out significantly less compared to borrowing the money.

It is also worth thinking about your personal circumstances. Consider whether your job and income are guaranteed and so whether you will have the money available to pay the loan. Make sure that you do not have any other big costs coming up that you need to pay for in the following month. Consider whether you will put any family members at risk if you get into financial trouble. Borrowing is a big decision and it can have impacts that we do not always consider when taking out a loan. So as well as considering whether it is the right time to get a loan we should also consider whether getting a loan at all is the right thing for us.

How to Increase how much you can save

If you want to increase the amount of savings that you have, then you may want some tips on how you can go about doing this. There are a lot of things that you could try and it is worth thinking about which might work the best for you. It might be that you will want to try a selection of things so that you can increase it by the most that you can possibly can.

  • Put money in high interest account – it is wise to put your savings in the highest interest account that you can. This will enable you to be able to gain money without doing anything. You may find that in order to get the best interest rates you will need to invest for a fixed period of time and the longer you lock it away the more interest you will get. Another option could be a notice account where you have to give a certain amount of notice before you can make withdrawals or you may be limited on how many withdrawals you can make from the account. You will need to find an account that suits your needs depending on how quickly you think that you will need to get hold of the money. Make sure that you keep checking the interest rates as if the money is not locked away you will be able to move it to a better account when one becomes available.
  • Set up regular payments – it can be wise to pay amounts regularly into your savings account. Even if it is just a few dollars it will mean that you are contributing something. You will need to make sure though, that you can afford to do this If you have loans, then it could be far better to pay these off first as these will be expensive. You will normally gain less from your savings than you will have to pay out on a loan and so it is normally sensible to repay that first. Therefore, take a close look at your finances and make those regular payments towards paying off debt rather than to go into savings, if necessary.
  • Spend less – if you can spend less then you will have more money available to save. This may sound obvious but difficult, however, you may be able to make some changes which are relatively easy. If you compare prices on everything that you buy, then you might be able to make some changes which could save you a lot of money without you even having to go without anything. Of course, it is also better to only buy things that you need and so to ask yourself whether you really need the items that you are buying or if you can easily go without them. You will want some treats but you may be able to cut back on a lot of things which could help you out.
  • Earn more – if you really want to boost your savings then trying to earn more money could make a more significant difference. This is not always easy but there are things that you might eb able to try. Finding a job that pays better or asking for a pay rise on your current job can be a good start. Then if you get a second job this could also be very helpful. Finding some freelance work or online work can be a solution as well. There are a lot of opportunities available but you have to make sure that you are taking up a genuine one. There are some jobs which are advertised where you will not get paid or you have to pay out money to do them. 
  • Sell things – it might be possible that you have items at home that you no longer use or need. You may be able to sell these items and raise some money that you will be able to put into your savings account. There are lots of ways that you can sell and it will depend on what items you are selling as to whether you will want to sell using an auction, classified, social media site or yard sale.

If you do all of these things then you should really be able to have a significant impact on the amount that you are saving. However, you may decide just to do one or a few things as they will fit into your lifestyle better. Making large changes like changing your job or increasing your working hours may not be considered to be worth it in order to just save a bit more money, but you may be happy to sell some things and buy less. You will need to find an approach that works well for you.