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Sep 26, 2018

Always Apply for Smaller and Manageable Payday Loans

Payday loans are unsecured short term loans designed as a stopgap remedy for financial problems. Payday loans cannot solve long term financial crises and they are not meant to be so. The ambit of payday loans has expanded over the years. When payday loans were in its nascent days, one could only borrow a few hundred quid. A grand or a thousand quid was almost unheard of. Today, you can apply for as much as two and a half grand. Not all lenders will offer two thousand quid or more but there are some that may entertain applications for such a high loan amount.

Payday loans have also undergone a significant transformation pertaining to the repayment term. While it was customary to repay payday loans in thirty days in the earlier years, now you can repay them over a period of three months to a year. Many lenders offer repayment terms as long as eighteen months. This has also had an impact on the loan amount. When a borrower needs to repay a lump sum in one month, one would naturally opt for only a few hundred, something that one can realistically repay in such a short span of time. When there are three months or up to eighteen months to repay, one can think of a few thousand quid. This has encouraged many borrowers to ask for more money. Some lenders have obliged as a response to the demand. Regardless of the entire spectrum of short term loans and the amounts you can apply for through Payday Pug, you should not borrow more than you need.

Always apply for smaller and manageable payday loans. Ask for a loan amount that caters to your immediate need. Do not try to solve long term problems with payday loans. Do not try to address all financial issues you have. Prioritize your financial urgencies and respond accordingly. The most important reason why you should not borrow more than you need is the high rate of interest. Payday loans are not cheap. The rate of interest can be anywhere from double digits to four digits in a year. Rates of interest can be as low as 40% APR to more than 1000% APR. This is a vast range. Anything beyond 300 percentage APR is basically more than 25% per month. A four month repayment term will lead you to pay twice the amount you have borrowed. If you are looking at 600% APR or higher, then you would be paying thrice the loan amount or more in less than a year.

A longer repayment term does not make it any easy to repay if you are borrowing in excess. Your capacity to repay will not change overnight or in a few weeks. The interest however will be constantly levied on your loan amount. The most common reason why most borrowers fall into the vicious cycle of bad debt is biting more than one can chew. Even if a lender is offering you more money than you need, do not go for it as at the end of the day you would have to repay the money and there would be more interest to bear.

Apply for payday loans through Payday Pug, get approved and take care of your urgent expenses or financial commitments. Repay the payday loans within the stipulated time. If you have several months and you can repay the remaining sum before the end of the term, do so and some lenders will be more than happy to offer you some perks for the same. You can always apply for another payday loan if you need some money in a few weeks or months.

When a lender knows your commitment to repay and you have dealt with them in the past, you are likely to get better terms. While you would qualify for a higher loan amount, the more beneficial fallout would be a lower rate of interest. Payday loans have high rates of interest because the risks are substantial. They are unsecured short term loans granted on the basis of income. Lenders are taking a huge risk. The high interest is their reward. When a lender knows a borrower and their credit repayment record, the risks are mitigated and hence better terms are offered.

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Representative example: if you borrow £550 over 18 months at a flat rate of 180% per annum (fixed) with a representative 770% APR you will make 18 monthly payments of £113.06, repaying £2,035.08 in total. Rates from 45.3% APR to 1721% APR. A short term high cost loan should not be used as a long term solution. We are a broker not a lender. We don't charge fees. We don't sell your personal information. We may receive a commission from the lender.

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