When you ask yourself whether payday loans are hard to pay back, unfortunately there is no simple answer. A better question may be whether loans in general are easy to repay. And this will depend on a variety of factors, some of which are impossible to predict the outcome of. For instance, if you unexpectedly lost your job, you may not be able to keep to your loan repayments, but you obviously wouldn’t have known this when you took out the loan.
You may therefore ask yourself whether it’s a good idea to borrow money, and payday loans in particular. We’ve therefore explored the pros and cons of payday loans below, to help you weigh up your options.
A payday loan is a type of short term loan, which you’d only borrow for a few days or weeks at a time. As the name suggests, you’d repay the loan on your next payday, when you get your paycheck - this will almost always be less than a month away.
Because payday loans are so short term, people don’t tend to need to spread the cost of borrowing, so the funds are typically repaid as a lump sum. Payday loans are also generally smaller than most other forms of credit, such as a couple of hundred dollars.
The purpose of a payday loan is to cover an unforeseen expense, like an emergency vet bill or the cost of fixing your vehicle. As these are not the sort of things you can plan or easily budget for, if you don’t have enough money saved to cover the cost, you may need to take out credit instead.
Even if you are looking to take out a payday loan, you can’t get them in every state across the US. So if you’re searching for alternatives to payday loans, there are a number of other short term loans available.
Installment loans are a type of credit you can borrow that allows you to pay back the loan over time. This could be just a few months, with a short term installment loan, or over many years, like with a mortgage. Installment loans can be secured and unsecured too - a mortgage is an example of a secured loan, as your property acts as collateral against the value of the loan. Most short term loans, on the other hand, tend to be unsecured, which means your assets are not used as collateral.
Installment loans can also be broken down into other categories, depending on the loan purpose and who they are aimed at. Bad credit loans, for example, are intended for people with a poor credit history, allowing them to borrow money when they need to. Guarantor loans are also a good option for people with a low credit score, as their guarantor offers some form of security for the lender - your guarantor agrees to make the loan repayments should you no longer be able to do so.
If you’d prefer to take out other forms of credit, rather than a loan, you could also look into options such as credit cards or a cash advance from your employer. It’s just important to completely understand the interest rates of the former, and with a cash advance, make sure your workplace offers this service, and that you’re not requesting it often. Constantly asking your employer for a cash advance may imply that you’re unable to manage your money well, which could lead to uncomfortable questions.
Before taking out credit, it’s a good idea to ask yourself three main questions. That way you can make an informed decision as to whether the loan will be easy to pay back. So if you’re considering a payday loan, ask yourself:
Once you’ve gone through these questions, you can then start to weigh up your options in terms of the different types of loan you can borrow. Is a payday loan a good choice for you? We’ve gone through the pros and cons of payday loans below, to help you decide!
Overall, whether a payday loan or a payday loan alternative is the right choice for you will depend on your personal circumstances. If you’re only looking to borrow a small amount of money, and repay the loan quickly, a payday loan could be a good option. But if you need to borrow a larger amount of money and spread the repayments over several months or years, you may wish to consider installment loans.
Whether you can make a payday loan request will also depend on the state you live in - you can check out a list of the states in which our lending partners work in via our homepage. The states listed would need to be your primary residence - it’s not possible to inquire about a payday loan in a payday loan state while you’re visiting, if the state you live in doesn’t offer payday loans.
Searching for a suitable payday lender can be time consuming and stressful. Your short-term credit could be a click away.
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