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How to Repay a Payday Loan

Many of the concerns about taking out a payday loan tend to be with regards to the ability to repay it. The loans are often repaid in one lump sum and this means that it can be concerning that such a lot of money needs to be repaid in one go. There are things that you can do though, which will help you to be more confident that you can repay it.

Know what needs to be paid and when

It is so important to be aware of exactly how much you will need to repay and the date that it will have to be repaid. With a payday loan, a direct debit to repay the full balance tends to be set up on the day that you are paid. This means that you will have money going into the account and so you will have a much bigger chance of being able to repay the loan. However, if you have other direct debits going out on that day, have an overdraft to repay first or your pay arrives late then there may not be enough money available. It is therefore important that you check this out to make sure that there will be enough money there when the loan needs to be paid. Also making sure that there is enough money to then manage all of the other things that need to be paid before you get paid again is important too. This will enable you to avoid having to borrow more money a few weeks later when you need to buy items that you cannot afford.

Cut back spending

It is wise to start cutting back spending as soon as you take out the loan Only buy what is absolutely necessary. This should enable you to have more money available to repay the loan and to manage beyond as well. It can be hard to do this but it is worth it and it will only have to be for a short time until you are managing again. It is important to make sure that you prioritise your spending carefully so that you pay for all of the things that you really need and that you are obliged to buy and then go without things that you can manage without. It is worth reminding yourself that you will be able to buy these things once you have got the money situation sorted so you will not have to go without forever.

Borrow the minimum

It is always wise to make sure that you do not borrow more money than necessary. The more money you borrow, the more expensive the loan will be. This means that if you only borrow the smallest amount then you will only have to pay interest on that small amount. It can be tempting to get a bit extra so that you can buy a few more things and this is where it can get unnecessarily expensive. If you are aware of how much the loan is costing you, this can help you to avoid spending too much as you will think about the value for money you are getting or the things that you are buying with the money. So, make sure that you focus on the cost.

Be aware of your finances

It is easy to focus on the loan and what you will buy with it and not think about how your finances are doing and how they will be affected by it. You need to be aware of how much money you have coming in and when and how much you have to pay out regularly for different things. Knowing exactly what is going on will help you to plan much more efficiently for the loan. You will know what your commitments are and how capable you will be of being able to make the repayment.

Earn more if necessary

Once you have looked at your finances and are familiar with them and you know what you need to borrow and how much it will cost you to repay, you will be able to work out if you can budget enough to cover the repayment. If you feel that this will not be possible then you will need to consider earning some extra money in order to cover the cost. This could just involve doing some extra hours in the job that you are already doing or you may need to do some temping or freelance work. Do some online work or perhaps sell some things to make the money that you need. There are many ways that you could potentially make some extra money, you will just have to think about which method will be the one that will suit you the best. Consider how much you need, what time you have and whether you can work outside of the home and this will help you to focus in on the best option for you.

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