It is worth thinking about how you will manage a loan when you take one out. Sometimes borrowers will get so taken over by thoughts about what they will do with the money they get form the loan, that they forget about their responsibilities and that they will have to repay it. It is good to find out about the repayment(s) so that you can work out whether the loan will be hard for you to repay or not.
How payday loan repayments work
Payday loans are different to other loans such as quick loans because they mainly have just the one repayment. This usually is taken out on the day that you are paid by direct debit. This means that you will not forget to pay it, but you have to make sure that there is enough money available in the account to pay it or else you will be charged. The repayment is set up so that it falls on your pay day which means that there is a lot more of a chance that there will be enough money available to repay it. This should make them easy to repay, but there are still people that struggle. It might be that they are not paid at the start of the day and the repayment is taken out before the pay arrives and so there is not the money available to pay it. It might be that there are lots of other payments going out of the account as well, so there is not enough left to pay the loan. It is therefore wise to make sure that you know you can cope.
How to work out if you can afford it
It is relatively simple to work out whether you can afford the loan, but it will take a bit of calculating. Firstly, you need to be aware of exactly how much you will be expected to repay and when; your lender will be able to give you this information. Then you need to look at your bank statements to work out whether you will be able to afford to repay it when you get paid. Look at how much you get paid and how much you normally pay out and whether there is enough left to cover the cost of the repayment. If there is not, then look at where you might be able to cut back your spending so that you can afford it. Look at the specific things that you buy and whether you can go without then in order to be able to afford that repayment,
Remembering you have to manage afterwards
Many people will forget that once they repay the loan, they will have to manage until they next get paid on the money that is left. This is likely to be significantly less than they are used to having. They will need to think about whether this will be enough. Sadly, many people do not manage and they end up getting another loan to help them to manage and this can lead to a spiral of debt. However, careful planning can avoid this. It is wise to have a budget and stick to it. Make sure that you are aware of everything that you have to pay and then you will know what you have left for other things. Try to start cutting back as soon as you get the loan, so that you will find it easier to manage once you repay it. Working out whether you can manage once it is repaid is as much part of calculating whether you can afford it as working out if you can afford to repay it at all. You need to be confident that you will be able to manage and that there will be no need for you to take out an additional loan.
So, whether a payday loan is hard to repay will depend on your circumstances and how well you plan things. You will need to work out whether you will be able to repay it or not before deciding whether you are going to take on the loan or not. If you look carefully at your finances and know how much the loan costs, then you should be able to work this out. For some people, it will show that it will be difficult for them to repay it. But for other people it will show that they will be able to repay it. It very much depends on how much the loan is for, how much income we have and how much we spend as well as how much we can reduce our spending if necessary. It should not be too difficult to work out and it is well worth the time in doing so as if you do not manage to repay the loan on time, you will be subject to extra charges which will not only make t even more difficult to repay but will also make it more expensive.