If you want a loan and you have a poor credit record, then you may worry about your lack of options and whether a payday loan is the only option that you have. It may not be the only option and even if it is the only option it need not be a bad option.
Just because you have a poor credit record it does not necessarily mean that you will only be able to get poor credit loans. It is worth taking a methodical approach to find out what your options are. To start with you need to make sure that you really need the loan. If you have savings use those and if you can wait then save up money instead as it will be far cheaper. If you cannot do this and a loan is the right option for you then start by checking your credit record. Ensure that everything on it is correct as mistakes could lead to your report being more negative than necessary. If there are mistakes then get the companies involved to change their records and also ask the company who produced the report to also change it. It sounds like a hassle but could make a significant difference. If you can get your credit record looking as good as possible it could mean that you will be able to get more choice when it comes to loans. There are some lenders that will also let you know if you would be accepted for a loan through them without this appearing on your credit report. This can be really helpful as every time you get turned down for a loan it will show on your credit report and put off other lenders.
Payday loan option
If you feel that the payday loan will be your only option then there are things that you can do to make sure that it is a good option.
- Compare lenders on price It is really important to compare the different lenders and see how much they will charge for a loan. You will see that there are big differences between them and so if you can pick one which is cheaper, then you will not have to pay so much. There may be other factors that you want to think about as well as price of course, but price is usually a very important concern for many borrowers. Make sure that you compare the AER as this includes all costs rather than just the interest rate. Also look at any charges they might have for late payments. Although I am sure you will hope to repay on time, it is good to be prepared for these costs and use them as a way to compare lenders.
- Borrow the smallest amount that you can Make sure that you do not get tempted to borrow more money than you actually need. This can be easy to do if you feel that you would like something extra, many people might like to take the opportunity to treat themselves. However, every penny you borrow will be charged interest on so the more you borrow; the more expensive it is. Therefore, you need to be really careful and borrow just what you need and no extra. You need to remember that you will have to repay it in a lump sum and this will be harder if you borrow more.
- Ensure you can repay It is so important to make sure that you areconfident that you will be able to repay the loan when you need to. A direct debit will be set up on your pay day so that you should have the money available, However, if you have other direct debits going out on that day, then you will need to check to make sure that there will still be enough money available. It could be wise to cut down on your spending from the time you take out the loan, so that you can be sure that you will have more money available when it is time to repay it.
- Ensure you can manage after repaying This extra money will also be useful once the loan is repaid as you will have to then manage until you next get paid with that chunk of money gone. Think about whether this will be possible for you and what you might be able to do, with regards to spending less and earning more, to make it easier for you.
So, if you plan things carefully then a payday loan could be a good option for you. Be careful to make sure that you are aware of how much you will need to repay and when so that you can prepare yourself for that big chunk of money coming out of your account. Check that there will not only be enough to pay it but also enough to cover the rest of your expenses and well.