Payday loans were set up to help people cope more easily with financial emergencies. They do not actually state what the money needs to be spent on though and so it is completely up to you. There are things that you should consider though, when you are choosing what to spend the money on.

The cost

All loans have a cost and it is always wise to calculate what the cost of a loan will be and then you will be able to decide how much you would like to spend on it. Loans vary in cost as well as you can compare them to see what the difference might be. If you choose to have a payday loan because you can get the money quickly, the compare lenders as their costs will vary and so you could save money if you find the right lender. It is important to think about what you are buying with the loan and whether you think that it is worth the cost. Consider the alternatives as well. Think about what the consequences might be if you do not get the loan and wait until you are paid to buy the item.

The repayment

It is also really important to think hard about repaying the loan. You need to be completely confident that you will be able to afford to repay the loan in full when it is required. In order to be sure it is important to take two steps. Firstly, make sure that you are aware of exactly how much you will be expected to repay and when you will be expected to repay it. You should be able to find this out from the website of the lender. You should find that there will be a calculator on the website and you will be able to use that to work out this information. You will be able to enter how much you need to borrow and how long you will need the money for and it will let you know the amount that you will be expected to repay. If you cannot find this or are not really sure how to use it then you can get in touch with the lender and they will be able to let you know.

Once you have this figure you will be able to use it to be able to work out if you can afford it. It is best to look back over your bank statements to see what you have been able to afford in the past months and this will allow you to be able to work it out. You also need to think about whether there are any specific expenses that come out in this month which is different to other months that might have an impact too. Make sure that you will be able to repay the loan and afford the other things that you will need to buy as well. Most people have regular things they have to pay for each month such as utilities, rent and contracts and these will still need to be paid for so you will need to make sure that you are able to afford those.

Value for money

It is also worth making sure that you are happy that the loan will provide you with good value for money. You need to think about what you will be gaining from the loan and whether you are happy to pay that money for it. In an emergency we might be prepared to pay a bit extra so that we can get ourselves out of trouble, but we need to be totally sure that we think that it will be worth it. It is worth comparing different lenders too as you will find that hey will differ in what they can offer and so some might give you better value for money than others. As well as costing different amounts you may also be interested in finding more about the lender themselves and whether you want to use them. You might be interested in knowing how long they have been in business, what their customer service is like, how they come up in reviews and things like that. All these things can give you an impression of them which might allow you to more easily decide which you think will be the best for you to use.

So, it is not really the type of emergency that matters so much as whether you feel that it is worth getting the loan and paying that cost for it. It is not easy to say that it will be worth it in certain situations and not in others. It will very much depend on that specific case and so you will need to think about whether it will work for you. It might seem like a lot of worry, but it will be worth it as you will be able to be confident that the loan will be the right decision and that you will be able to repay it.

There are many things that we can use payday loans to pay for because the lenders do not restrict the use of them. With some loans there are specific requirements for what they need to be used for but payday loans do not have this. This means that you can choose what you spend the money on. However, there are some restrictions still due to the nature of the loans.

The amount you can borrow

Payday loans tend to be for pretty small amounts of money. They are often for a few hundred pounds, although you may be able to borrow up to a thousand in some circumstances. The amount that you can borrow will depend on the lender and so you may be able to approach different lenders to see what they might be prepared to lend you. You may find that if you have used a lender before they will be more likely to lend to you. They may start by lending smaller amounts and then if you can show that you are capable of repaying on time, they may lend you a larger amount. This means that you may only get a few hundred pounds to start with. Whether this will be enough will depend on how much your overdraft is.

When it has to be repaid

It is also important to realise that a payday loan will normally have to be repaid when you next get paid. This means that you will need to find all of the money to pay back the loan, this includes the amount you borrowed and the fees when you are next paid. So, this could be a few weeks or maybe even a few days’ time. If you have only borrowed a small amount then this could be okay, but if you have a big overdraft and have borrowed a lot of money to repay it then you may find that you will find it hard to repay. You also need to think about the fact that you will have your other bills to repay as well, which could be expensive.

So, whether it should be used to repay an overdraft could very much depend on how much the overdraft is and how easy it will be to repay the loan. It is also worth thinking about the cost of the payday loan compared to the cost of the overdraft. Overdrafts can be very expensive and the interest rates tend to be high. If you compare the cost with a payday loan, you may find that using a payday loan for a few weeks could be cheaper than having an overdraft for that time. However, you will need to be really sure that you will be able to repay the payday loan. This because if you miss the repayment there will be higher charges and this could make it dearer then than the overdraft. You should find out before you take out the loan so that you know what risk you are taking. It is wise to think about how confident you are that you will be able to repay the loan and be completely aware of the consequences of not doing so.

It is also worth thinking hard about whether paying off your overdraft will really help you. This might seem odd but some people see their overdraft as a fund that they can spend. Therefore, once they have repaid it, they will spend it again. This can lead to problems as they can then have a payday loan to repay and an overdraft. Then when they get paid, their salary will repay the overdraft and there may not be enough left to repay the loan.

If you have an overdraft you may feel like you are in a rut and you want a clean slate. However, paying it off with a loan may not help. If you know that you will be able to get enough money and repay the loan, then it could help as long as you do not use the overdraft again. However, in some circumstances it will not help you, if you cannot borrow enough money, if you cannot repay the loan or if you go overdrawn again. Therefore, you need to think very carefully about it. It can be worth spending a significant amount of time thinking through whether it is a good idea and what the consequences might be of borrowing the money like this. It could be the answer that you are looking for as having to repay the payday loan very quickly and being forced to do so will clear the debt and you will be free of it. However, it may not be that easy and you will need to be confident that you will be able to afford to do this.