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How to Properly Deal With a Pay Day Loan

April 20, 2014 by lucas in Loans

The definition of a payday loan is a loan that offers short term loans in small amounts. You’ve probably seen them plenty of times, all over the internet, in magazines, and on the TV. You can find them in a lot of high street shops and internet sites too. They are fairly simple to get as far as loans go, but in most cases you have to be careful because the interest rates can turn out to be scarily high. People who aren’t sensible and go ahead and get one of these loans without thinking it through often end up in hot water. Although these loans can be very helpful, it is wise to think of alternatives before going for a pay day loan. However, if you’ve already considered the alternatives and decided a pay day loan is best for you, here’s how to properly deal with one:

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Before Taking Out a Loan

When you apply to take out a payday loan, the lender should always do a check to make sure that you’ll be able to pay it back. This means that they should check how much you’ve got coming in each month to ensure that they’ll get their money back and you won’t end up in debt. The lender should also inform you of the main features of the loan, how you’ll be required to pay it back, and what happens if you can’t pay the loan back. Research the best companies by reading reviews online and look for the best interest rates. Click here to start with Buddy Loans.

Paying Back Your Loan

You’ll usually be given around a month to pay back the money you borrowed, as well as the interest owed. The usual way you’ll pay back a loan is with a bank debit card. The moment you take out the loan you agree for the lender to take money out of your bank account when it’s time for you to pay your debt.

Extending a Loan

If you’re having trouble paying back the loan, the lender might offer you longer to pay it back. A company can also roll over your loan, but they shouldn’t do this more than twice as it’ll incur more charges for you. If you’re really struggling to pay back your loan, you should get debt advice ASAP.

Making a Complaint

If you’re not satisfied with the way the pay day loan company are handling your situation, you can complain to the FOS. However, your complaint will only be valid if the loan company are not following the good practice customer charter and the FCA rules.

Pay day loans can be dangerous, but only in the wrong hands. If you know for a fact that you’ll be able to pay back the loan in full, on the date set by the company, including interest, then there’s no reason you shouldn’t get a payday loan to help you purchase something important. It’s great for when your freezer suddenly packs in! However, it isn’t advisable that you get a payday loan and blow all of the money up the wall just because you felt like it. Use your common sense!