What are Payday Loans?

There are still quite a few people that are not really sure what payday loans are or they think they know what they are but are not quite right. This is often the case with people that have not used the loans before and that means that as they have not experienced them, then they do not really know how they will work. It is a wise idea to find out more about them so that if you need a loan, you will be able to decide whether it is the type of loan that will be of use to you.

How Much Can You Borrow?

Like with all loans, the amount that you can borrow with a payday loan via lenders such as Boutell.co.uk will vary. However, it can be more restrictive than other ways of borrowing. Normally you are only able to borrow between £100 and £1,000 which means that it really is only designed for relatively small purchases. It is also worth noting that a first time borrower may not be able to borrow so much money. This is because the lenders will often want to lend just a small amount of money to start with and then if they feel they can trust the borrower to repay it, they will then lend them more, so they may need them to borrow and repay a few smaller quantities before lending them a larger amount. 

How Do Repayments Work?

Repayments are a little different to other loan repayment types. The loan will normally need to repaid in one lump sum. This means that you will need to find the money to repay the loan all in one go. It is important when you are planning this, that you make sure that you have enough money available to not only repay the loan itself but also the interest and fees that you have to pay too. It is wise to ask the lender how much this will be so you can pan carefully. You will have to make the repayment on the next day that you get paid. You might think that will be fine and will mean that you will be guaranteed to have the money, but make sure that you do not have other things to pay for as well. You may have payments coming out of the account on that day that you need to find the money for as well.

Who is it For?

We may have ideas about who payday loans are for. It is true that they lend to people who have a poor credit rating and that means that they are partly aimed at people like this. However, there is nothing to say that you cannot use them even if you have a good report. You will find that there are other features of the loans that might make them suitable for other people, such as the fact that they are quick to arrange. It can be possible to arrange the loan within a few hours with some lenders and this means that you will be able to get the money really quickly. This can be very handy and means that if you do have an emergency where you need money fast, this loan can be really handy for you.

So, you can hopefully see that there are a few main features of payday loans which set them apart form other loan types. This means that you might find that they will be useful in certain situations. Therefore, bearing them in mind when you are choosing between loans, could be extremely useful to you as it could mean that you will end up finding the perfect loan. I you do not consider every one, then you could find that you choose one that is not so good for you and you will end up regretting your decision.

Anthony

I really enjoy writing about finance. This is because I know that money is something that everyone has to manage. I hope that in a small way, I can help people with managing their money due to what I am writing about. I try to write informative articles which are also helpful and I hope that they get people thinking more about money and changing what they do with their money so that they can feel more in control of it. I try to write about topics which will interest and help as many people as possible and in a clear way.

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