Wisely manage payday or short term loans

Sometimes a short-term loan is the only option to get through a rough time, but you can minimise the impact.

13:09 24 January 2014

For many of us, we recognise that the funds we receive from our payday will not be enough to see us through till the next payday. When we reach that point we may turn to short-term loans to try and ease the financial burden. This can be a tremendous help as long as you use the options wisely. Here are a few pointers to keep in mind when considering a short-term loan, such as a payday loan.

• Shop around—you can ensure that you are receiving the best deal if you take the time to compare different loan products. It is easy to assume that one payday lender will have terms just like the next one, but that is not the case. A little extra work could save you a lot of money during repayment.

 

• Amounts—even if you are approved to borrow a certain amount, you should only borrow as much as you will need. If you are tempted to borrow more, remember that the interest is usually quite high and you will have higher repayments. You will also end up paying a lot more over the course of the entire repayment.

 

• Savings—one of the ways you can try to reduce the inevitable cost of a short-term loan is to make sure that you repay any amount that is unused. If you also receive money sooner than expected pay the loan as soon as possible. Many short-term loans are calculated with a daily interest rate so you do save if you can pay off a portion of the amount sooner than expected.

 

• Penalties—before making any agreement with a short-term lender such as a payday lender find out if you will be charged fees for paying things off early, making late payments, or other plausible scenarios which could occur.