Payday loans are now getting more well-known and so people do have less questions about them these days. Most people now know that they are more expensive than conventional borrowing but this is because they will not do a credit check and they can get money to you very quickly. This means they take on more risk and have to work more quickly and therefore charge more for that. However, there are still quite a few questions that people still might have about payday loans and whether they will be able to borrow enough could be one of them.
How much can you borrow using a payday loan
Payday loans do vary and so the amount that you will be able to borrow will also vary. Some lenders will lend up to a thousand pounds but some will not lend that much out. The lenders may also decide how much they lend based on whether you have borrowed before. For example, they may only lend you a few hundred pounds the first time you borrow with them but if you pay that back when required then you will have built up some trust with them and they may allow you to borrow more when you approach them again. This means that if you are a first-time borrower you are likely to be at a disadvantage. The amount that you can borrow may also be determined by your income as if you have more money available to repay then you may be able to borrow more.
If you approach different payday loan companies then you may find that they will be prepared to lend you different amounts. This means that if you need an amount that some companies will not allow you to borrow then you should be able to find a company that will. It may take a bit of searching but will be worth it if you can find the right company to help you.
Some people might take out several payday loans at once in order to make sure that they have enough money. This is unwise and should not even be allowed as payday enders do have restrictions on them. They are not supposed to allow a person to have more than one payday loan but it is possible if you go to multiple companies and this can be risky for the borrower. Obviously the more that is borrowed, the more that needs to be repaid. If all loans need to be repaid on the same day then you could find it impossible to have enough money to pay them all or to have enough money left after you have paid them to manage all your bills.
How much should you borrow with a payday loan
It is important when you are borrowing money to focus more on how much you should borrow rather than how much you can borrow. It is really wise to borrow the smallest amount possible. This is because you need to think about the cost of the borrowing and how easy it will be to repay. The less you borrow the cheaper it will be and the easier it will be to repay.
Therefore, you need to think about what you want the money for and therefore how much you need. You should make sure that you need to borrow it all and that you cannot get some from other sources, perhaps form your savings, by selling things or something like that. Then you can borrow the very minimum amount. It can often be tempting to borrow a bit more than you need so that you can treat yourself to something. However, this is expensive and having a larger loan will increase the risk that you will not be able to afford the repayments.
Some people would even argue that the purpose of the money was important when deciding whether to borrow any money using a payday loan. That if the money was being used to buy luxury items then it is not worth the cost of a loan and that the person should wait to buy the item or not buy it at all. Some say loans are for emergencies only. This is obviously a very personal viewpoint but it is worth remembering that because you have to pay for loans you do need to be really sure that they are the right thing for you.
It is also important to make sure that the amount that you borrow will be small enough for you to be able to afford to repay it. Calculate how much you can afford to repay and then look at how much you normally have left at the end of each month after paying your bills. You should be able to see this by looking at your bank statements. By doing this you will be able to see whether the repayment will be manageable for you or not.