When you take out any type of loan, it is important to think hard about how much you are going to borrow. This is because you will be charged interest on everything that you do borrow and you will therefore need to make sure that you calculate the amount very carefully and try not to borrow more than you need. You will also find that there could be some restrictions in how much you will be allowed as well.
How Much do I Need?
It is important to carefully calculate how much you need to borrow. To start with think about what you need the money for a how much that costs. Often, we stop here and borrow that much plus a bit extra for a few treats, but we need to think harder first. To start with, look and see whether you have any savings or any spare money in your bank account that you can use to put towards the cost of the item that you are buying as this will allow you to borrow less money. You should also not get a bit extra for a treat. It is so temping to do this, especially if you have not been able to treat yourself for a long time. It is important to remember that you have to pay interest on everything that you borrow and so a treat can be really expensive if you buy it this way. If you borrow extra it will also increase the risk that you will not be able to repay the loan in full and that will mean that you will have extra fees and charges to pay.
How Much Can I Have?
It is also important to find out how much you can borrow form the lender. Different lenders will vary in how much you can have but generally a payday lender will let you have between £100 and £1,000. This may mean that you will not be able to borrow enough for your needs. However, only borrowing a smaller amount can be easier as you will not have so much to repay. You may find though, that if you have not used a lender before, that they will only lend you a few hundred pounds. This is because they do not look at your credit report to determine whether they feel that you can be trusted to repay them. They will lend to those that others will not and this means that they will want to build up some trust with them first. Therefore, they may only lend a small amount and once that is repaid might then be happy to lend more money. So, if you need more than a few hundred pounds, then you might have to ask the different lenders whether they will be willing to let you have that much or go to a lender that you have used before.
It is always wise to borrow the minimum amount that you can. This is because it will keep the cost of your loan down and it will make it easier to repay as there will be less money to find. This is true of all loans, not just payday loans because they will all charge for every bit of money that you borrow from them. You will also be restricted on how much your lender will be willing to let you borrow, so even if you have decided on a certain amount, you may find that you will not be able to borrow that much money. With a payday loan, the amounts do tend to be smaller than with many other lenders.