Everyone who has ever looked into getting a payday loan realises just how expensive these types of loans can be. Interest rates start from around 800% ARP and rise to 5000 plus APR for the likes of Wonga.com.
Therefore taking out one of these loans is a decison that shouldn’t be taken lightly!
We’ve spoken to the personal finance & payday loan experts at Lending Expert who provided us with a list of tips and things to look out for when choosing a short term or Payday Loan. They compile and compare payday and short term lenders to offer a quick and easy payday loan comparison service.
Here are some considerations when choosing a short term or payday loan
1. Take your time to shop around for the best deals. Some lenders charge much higher rates than others and you need to ensure you are getting the best deals. Use the comparison tools and websites on the internet to find the best deals.
2. Some payday and short term lenders have a bad rep and offer poor customer service. Check online reviews and get feedback from friends or family who have just a payday lender in the past or a loan provider they have been happy with. Go with recommendations from others who have been happy with their lender of choice.
3. Ask yourself, do you really need the loan or can what you wish to buy wait until you have saved up the money you need? Dont get a payday loan unless you really need to and no other options.
4. Consider borrowing what you need from friends and family, and avoid having to take out a loan. Often friends and family will borrow you the money you need without having to pay interest charges or fees.
5. Consider using a credit union. They are much cheaper and can offer loans from £100 – £500 quickly just like a short term lender would. A quick search online will help you find you local credit union in your town or city.
6. Ensure you can pay off your loan within the agreed timeframe to avoid fees or any roll over interest costs and penalities. Most lenders have moved away from roll up fees and now also dont charge you any extra if you wish pay off your loan early if you wish to save on interest fees.
We hope you have found these tips useful and good luck finding the loan you need at the best possible interest rates.