Payday loans are an expensive way to borrow. Never take out a payday loan unless you’re 100% certain you can repay it on time and in full – otherwise the costs can soon spiral out of control. If you’re thinking of getting one, here’s what you need to know.
A great benefit of payday loans is that you can get the money in your account the same day, if you are approved for a loan. When it comes to payday loans, same day service has become the norm. However, to avoid borrowing money that you cannot afford to pay back, keep these tips in mind.
How payday loans same day loans work
Payday loans are short-term loans designed to tide people over until payday. The money is paid directly into your bank account.
Normally you have until payday to pay back your loan plus interest, although some payday lenders let you choose the repayment period.
On the repayment date, the lender takes the full amount you owe plus interest directly from your bank account. This happens even if you need the money to pay essential bills like mortgage or rent, heating and food.
A payday loan will just make your situation worse if you can’t afford to pay it back on time. It may also affect your ability to get credit in the future.
Before agreeing to a loan, many payday lenders will ask you to set up a debit order. This lets them take what you owe directly from your account via your debit card on the repayment date. So if you don’t have enough money in your account to repay the loan in full you may end up missing other bill payments or exceeding your overdraft limit and having to pay bank charges.