Will a Payday Loan Cover the Cost of Christmas?

If you are worried about the cost of Christmas then you may be considering borrowing money to help you through. Even as soon as January we can start worrying about the costs of Christmas, for some people it can be a year long stress. For others they will leave things until the last minute and suddenly find that there is not enough money to pay for all of the gifts, food and decorations. Christmas can be a really expensive time of year and many people do borrow to help themselves through this time. Some may look to a payday loan to help out, but will it be a good choice?

How much you can borrow

A payday lender will usually only lend up to £1,000. This means that you will be restricted to only borrowing this much. This means that you might not have enough money. It obviously depends on how much you want to spend on Christmas. For some people £1,000 would be a lot of money and far more than they need but for others it would just be a very small amount. It is also important to understand that even if payday lenders advertise that they will lend this much, they may not lend this much to everyone. They tend to lend less to first time borrowers and when they have proven that they are capable of repaying they will then let them borrow more money. This means that you will need to think about whether this will be enough money. You may need to contact a series of payday lenders and find out how much they are prepared to lend so that you can decide whether you will be able to borrow enough money for your needs.

How long you can borrow for

It is also important to understand that when you take out a payday loan, you will only normally have the money for a few weeks. You will normally be expected to repay everything that you owe plus the interest on your next payday. This means that you will only get temporary help. This could be enough for some people but there might be others that want to borrow larger amounts of money and will need to repay in instalments to make sure that they can afford those repayments.

Repayment

If you are considering a payday loan then you need to think carefully about how you will manage that repayment. If you do not repay all or any of the money then you will get additional fees and no one wants hat. Therefore, you should take a careful look at your finances to make sure that you can afford it. It might be that you will be able to reduce your spending in other areas so that you can afford the loan. This Can seem a bit boring, but you will not regret it. If you feel that you will not be able to afford it even if you reduce spending, then you will need to investigate ways to earn more money in order to help. It is also really important to make sure that you have enough money left to cope until you are next paid. January is often a very long month financially as most people have very little money after Christmas. Often paydays are earlier in December as well so you may have to manage for five weeks. Think hard about how you will manage and whether you will manage before taking out the loan.

Conclusion

So whether a payday loan will cover the cost of Christmas will depend on how much money you need. You will need to find out how much you can borrow and how much you need and whether you can get enough. It is also important to understand that the borrowing is very short term and that you will have to quickly repay it. You will need to calculate whether this is something that you will be able to afford and whether you will be able to afford all of your other expenses as well. There is a lot of working out to do but it is worth it as you will discover whether you will be capable of repaying the loan or not. It is really important to do this as not repaying will be expensive as you will get charged. Try to think of ways that you can reduce your spending and earn more if you think that you will struggle. In fact, it can be wise to do this anyway just in case you have miscalculated and you end up needing more money. You never know what emergencies might come along and it is worth being well prepared for them. You will then be able to take out the loan with confidence knowing that you will be capable of repaying it and you will not have to worry about the date it is due to be repaid and whether you will be able to afford it or afford other bills that will come along afterwards.

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Is a Payday Loan a Safe Way to Borrow?

We might feel that there are some ways of borrowing that are safer than others for a variety of reasons. It might be that we feel some lenders can be trusted more, that some loans are easier to repay and that some are better for our credit record. If you have concerns about payday loans then it is worth addressing those as it could be that you are missing out on a loan opportunity because you are needlessly worrying about something.

Can I trust payday lenders?

Many payday lenders are relatively new to the market and therefore they may not be companies that we have heard of. We may find that when we compare them and see a list of lenders, that there will be very few that we know. It might also be the case that those that we do know are only known to us because of advertising and not through experience. This does not mean that you should not trust them though. Just because you have heard of lenders does not mean that they are trust worthy, so this is also the case for payday lenders.

It is good to do some research though to find out more about the different lenders and then you can make up your own mind as to whether you think that you can trust them. The best place to start is by asking people that you know. Find out whether they have used a payday lender and whether they are prepared to recommend any to you. They may have a mix of positive and negative experiences and it is wise to learn form those when you are considering hat to do.

It is also worth looking at their websites and judging what you think about them from there as well as finding out more about the company in general and their reputation by looking online. You may find that people are more likely to write negative things as we are more likely to want to report bad experiences rather than good ones, but it is still worth looking and comparing different lenders like this.

Are payday loans easy to repay?

You may feel that you cannot trust payday lenders because you have heard that the loans are hard to repay. It is worth understanding how repayments work so that you can judge whether this really will be something that you will find hard or not. A payday loan is normally repaid in a lump sum on the day that you are paid. This means that you will need to make sure that you have enough money available to repay it and that you set up the direct debit on the right day so that you are sure you have enough money to cover it. You will need to make sure that there will not be too many other payments going out on that day or else there may not be enough left to repay the loan. If you carefully calculate the figures and make sure that you are not borrowing more than you can afford to repay, then you should be okay and manage it. However, it is still worth being wary and making sure that you are careful with your spending just in case. You should also be aware that you will then have to manage for the rest of the month, after the payment is made, short of that much money. Make sure that you will still be able to manage all of your other expenses and keep spending on items that are not necessary to a minimum. It will be challenging to most people but if you plan carefully it should be possible for you to cope.

Do payday loans have a negative effect on credit records?

Many of us are aware that our credit record can have a big influence on, not only what borrowing we have access to, but even things like whether we are accepted to rent a property or if we get accepted for some jobs. This means that we will want to be careful that things that we do will not have a negative impact on our credit record. It is worth noting that any loan you take out and then struggle to repay will appear negatively on your credit record. There will be a note of all loans but if you can show that you are able to repay them, then this is likely to be a positive thing. The problem with credit records is that all lenders etc will have different ways of judging whether they want to take you on. Most will like to see evidence that you can repay your loans on time, but some will not mind a few missed payments and may even like a few missed payments as you will get charged extra for this and they like the idea of being able to charge you a bit extra. However, lots of missed payments are unlikely to ever be seen in a positive light.

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