If you are looking to get a payday loan, you may wonder how to decide how much to borrow. There are different things that you should consider to help you to make up your mind.
The cost of what you need to buy
You need to consider how much you need to buy the item that you are borrowing for. This is easy if you need to pay for a specific thing, perhaps a bill that has come in that you cannot afford to pay, for example. However, it may not always be that simple. If you need food that will keep you going until the end of the month or you need to have enough just to pay for everything you might need, then calculating it will be much harder. Do your best to estimate it as accurately as possible. It is worth noting that everything you borrow will be charged for, so it is best to borrow the least amount that you can to keep the cost down. However, if you do not borrow enough you could risk needing another loan and you may struggle to get one as you should be paying off one payday loan before you get another.
How Capable you are of repaying
It is also extremely important to work out how capable you are of repaying the loan. You need to make sure, to start with, that you are clear about how much you need to repay and when. Your lender should be able to make this clear to you. You will then need to work out whether you will be able to afford this. You should look carefully at your own finances and work this out. You need to think about how much you get paid and whether you will have enough to cover the cost of the loan. You also need to think about what else you need to pay for and whether you will have enough left, after repaying the loan, to pay for all of these other things. Hopefully, you will be able to find ways to reduce your spending on non-essential items so that you can allow for this.
The cost of the borrowing
Every loan that we take out will cost money and so it is wise to find how much that cost will be. This is easy to calculate if you know how much you are repaying in total, as you just take off the amount that you have borrowed from the total amount that you have to repay. If you are still unsure then ask your potential lender, you should be able to find out from customer services. It is good to think about whether you feel that this is good value for money considering what you will be spending the money on. Also, you should compare that cost with other lenders and you will be able to work out whether you think that this is the best lender for you or whether you would like to use an alternative one instead. There are lots of payday lenders and so you should have plenty to choose from. It will take a while to look at them all and compare the costs but it will be worth that time because you could potentially save a significant amount of money. You may also want to compare how much you will be charged if you do not manage to make the repayment as that could vary between lenders as well.
It can be a difficult decision but it is worth some thought. You need to be aware of what you will be spending and whether you feel you will be able to cope with the repayment. This is because if you do not manage to make the repayment then you will be charged extra money. You will also find that you could struggle later that month, even if you do make the payment and this could mean that you may even have to consider getting out another loan so that you can manage. This is not good as it will cost you more money and could put you in the same position month after month. However, you should be able to manage well if you can prioritise your spending. This means to make sure that you are carefully only buying things that you really need and going without those luxuries for a while. This can be tricky and it can feel hard, but it is worth it because we will be able to manage more easily and you can treat yourself once you are confident that your money situation is sorted again. It should not take that long and you will soon be able to stop window shopping and do some proper shopping again with the confidence that you have the money there to spend.