Unfortunately, there is no simple answer to this question, how easy or hard your payday loan will be to pay off depends on your personal situation. How easy your payday loan will be to pay off depends upon how much you have borrowed, how long you need to borrow it for, whether you have planned carefully how you will pay it off and your current financial situation. There is no reason why a payday loan should be particularly hard to pay off, with careful planning and consideration a payday loan can be a helpful tool in your financial arsenal.
The main thing that will affect how easy your payday loan is to pay off, is whether or not you make your payments on time. Making payments to your loan on time means avoiding financial penalties and increasing interest on your own (see what happens if you cannot make repayments). Once interest begins to build on a payday loan it can become difficult to pay off, as payday loans often have a high interest rate compared to a traditional loan. This means it is very important that you make your payments on time and in full in order to avoid this building interest.
How can I make sure my payday loan is easy to pay off?
Responsible payday lenders will do that utmost to ensure that they only lend money to those who can afford to repay it. This is why not everyone is eligible for a payday loan. If you have been approved for a payday loan you should not have trouble paying it off. However, there are a few things you can do to ensure that paying off your loan is as easy as possible.
1. Plan carefully exactly how you will repay your loan
One of the best ways to make sure your loan is easy to pay off is to plan your borrowing carefully. Decide exactly how much you need to borrow and do not borrow more than you need to. Work out exactly how much you will be paying back each month and how much interest you will be paying, make your plan realistic, there is no point borrowing a months income and thinking you will be able to pay it all back next month.
2. Make all your payments on time and in full
If you have thought carefully about the amount you can afford to borrow, this step will be easy. Making regular payments means you will avoid the mounting interest which can occur when payments get missed. Not to mention that there will be no chance of unforeseen charges, which should mean smooth sailing for you while you pay off your loan.
3. Pay your loan off early if you have the chance
The majority of lenders will allow you to pay off your debt early with no extra fees. This means you will be able to repay the money you owe without risking any late payments and the fees and added interest that comes along with them. Repaying early is a great way to ensure that you don’t fall into a habit of late payments and end up paying off more than you need to.
4. Use a respected payday loan platform
At Pheabs we don’t charge any fees for our service, nor are there any fees for submitting a form or hidden costs – whether you are looking for payday loans in California, Texas, Kentucky or other states. We simply receive a commission from our partner lenders if your loan enquiry is successful. With other platforms you may end up paying just to secure a loan, making it harder to pay off and costing you money.
When might a payday loan be hard to pay off?
Paying off a payday loan will be hard for anyone who hasn’t carefully considered how exactly they are going to pay it back. Just taking out a loan and hoping for the best is never a wise financial decision. Whenever you take out any kind of loan it is important that you have considered whether or not you can afford to take out the loan and how and when you will be able to make repayments.
Think carefully about how much money you need and for how long you need it. If you need to borrow $10,000, but you have no idea when you will be able to repay it, a payday loan probably isn’t the best option. Whereas, if you need to borrow $500 for a month and you know you will be able to repay it easily once your next paycheck comes in, it won’t be hard at all to pay off your payday loan.
Another reason you might miss payments on your loan is that you have a very unstable financial situation, maybe you’re moving between jobs or your expenses change drastically from month to month. This will mean it is difficult for you to know if you’ll be able to pay off your loan and how long it will take. In this situation a payday loan can be hard to pay off if you end up having a few months where you cannot make payments.
With a payday loan the risks are often higher when you’re borrowing large amounts of money. Payday loans generally aren’t designed to be used for large amounts of money or over long periods of time.
Payday loans can offer you fairly large loans it is worth considering whether this is the best option for you. It might be helpful to look at the worst case scenario; for example if something happens and you cannot pay off your loan until a year after the time agreed how much interest will have accrued on that loan? Will there be any late payment fees? Remember, that will be much harder to pay off a very large payday loan than a small one in this worse case scenario. If you’re unsure, it might be worth seeking the services of a financial adviser.