Payday Loans can be a nightmare, but they can also be a saving grace for those emergency financial situations. Whilst Enjay Debt Management does not recommend the use of Payday Loans, we can’t stop consumers from using them. We strongly support our customers in making informed decisions, so here’s a list we’ve compiled on Payday Loan information:
7 Points on Payday Loans
1. Payday loans are short-term lending solutions. They are often used by people to help them financially until their next payday – hence the name. They’re very easy to source, so can potentially be dangerous if used mindlessly.
2. There’s a problem if you regularly use Payday Loans. These loans can be used as a final solution for a sticky financial situation, however, they should not be used regularly as a way of filling the gap between your incomings and outgoings each month. By doing this, you are potentially causing yourself a lot of future financial problems. If you have a problem regarding Payday Loans, let us know and we can help.
3. Payday Loans cost more per month than Credit Cards do all year. Lenders usually charge a fee for Payday Loans instead of an interest rate. On average, a £100 loan for a month has a fee of around £25 – so you would need to repay £125. Compare this to the interest rates on a Credit Card, and you’d notice that if you borrowed the same amount on a standard Credit Card at 20% APR, then it would cost £20 to borrow £100 for a WHOLE YEAR. This is £5 less than payday lenders charge for just one month of borrowing.
4. If you can’t repay it on time, you can’t afford to get one. The most important part of Payday Loans is paying it back on time. If you don’t, the charges are stifling and will result in much, much further debt. So if you can’t afford the loan, don’t get one – no matter how desperate you are. If you are struggling financially, our team of experts can help you.
5. If you’ve borrowed once, they’ll try to tempt you into doing it again. This temptation proves too much for many of our customers, and this is where you can find yourself in a situation spiraling out of control. Once you’ve used a Payday Lender once, the company knows you are a ‘good’ customer as they have made money from your service. Always resist their efforts at tempting you, as it is often just a way of getting you to borrow more.
6. Beware of borrowing over long periods. Many lenders give you the option to borrow over longer periods, but this means a much higher amount of interest you’ll need to pay back. If you’re in a situation where you need a Payday Loan, you should always have a plan for how you’ll pay back the money.
7. Payday Loans can affect your ability to get a mortgage. Even if you pay the loan back in time, a payday loan on your credit report can have a negative effect. The details of your loan are visible to potential lenders, including how much you’ve borrowed and how often you’ve used the services.
If you are experiencing any financial problems and are searching for assistance, we can help you. Our confidential service enables us to work with you and your creditors so that you can pay off your debts without having to take out another loan. So if you have any questions or would like to discuss your situation, please do not hesitate to get in touch with our team of experts on 0800 612 7958.