If you are going to take out a payday loan, you need to know how to increase your chances of paying it back on time. The absolute last thing you want is to be late on a loan or even default on it. This can completely ruin your credit, so it’s important to get all the tips you can for prompt payment. This article will provide you with some valuable advice to help you preserve your credit score. If you pay off your loan on time, your credit score will get a nice little bump that will benefit you in the future.
Pay it Back Early
You should really try to pay back your payday loan early if at all possible. This will help you decrease your chances of defaulting, which is the last thing in the world you want to happen. If you are paying back the loan in instalments, pay as much as possible with each one. This will help you save money on interest as well.
Get the Lowest Interest Rate You Can
The lower the interest rate on your loan, the less challenging it will be to pay back everything you owe by the due date. One of the most common reasons people default on loans is because they are being crushed under a ridiculous rate. You can get a good deal by simply shopping around and comparing offers from various lenders. You don’t want to make a final decision of any kind until you’ve done this. The more time you spend comparing deals, the better your chances are of getting this type of loan without any issues.
Choose a Flexible Lender
You also want to look for a flexible lender who is very reasonable and fair. In the event that you do need to pay back your loan after the due date, you’ll likely be able to get an extension. Not all of these private lenders are so amenable, which is why you have to do your research. You’ll want to know that you have a lender who can work with you if it comes down to it.
Don’t Opt for a Longer Term
If you are only borrowing £100 to £500, a term of two or three weeks should be perfectly fine. You might be able to get a longer term from your lender, but it’s not a good idea. The longer you have to pay back the money, the more you will spend on interest and other fees. This is a common ploy that lenders use to make more money off borrowers. Don’t fall for it, because you will just end up with a lot of regrets.
Read the Fine Print
You will need to look over the fine print in the loan agreement before finalizing it with your signature. This document spells out all of the terms of the loan, which you will need to know about for obvious reasons. This includes any and all fees as well as the total amount that you owe the lender after interest and everything else. You’ll want to know exactly how much you will be required to pay back and by when. By doing this you will be able to avoid any confusion or problems later on when the money comes due.
Only Borrow What You Need
One of the biggest mistakes you can make with a payday loan is borrowing more than what you need. This will only lead to problems paying back your loan, which is definitely not good. When you borrow more than what you need, you also pay more interest and other fees. It all adds up very quickly, so you must keep that in mind. Just because you are able to borrow up to a certain amount doesn’t mean you should. Before you even apply for the loan, you should determine the exact amount you will be borrowing.
Set Up Automatic Repayment
There are quite a few payday lenders that will let you set up automatic repayment, and some of them even make it a requirement. This is when you agree to the lender taking the money from your checking or savings account on the day the loan is due. When you opt for this you will know that the money is going to get paid back and that you won’t forget. If you have a very busy life, it can be easy to forget to make the payment.
Before you go through with getting your payday loan, you will have to keep all of these things in mind. This information will work in your favour when it comes to paying back everything that you borrow on time. You will be very glad you took this advice because of the positive effects it will have on your credit as a whole.