How Much Can I Borrow from a Payday Lender?
Posted On August 4, 2019
If you are considering taking out a payday loan then you might have a selection of questions first. This is more likely if you have not used this sort of loan before. It is good to have questions as you will be able to think about how the loan works and whether it is the right choice for you. One of your questions might be how much can you borrow. This is a genuine question as lenders will vary in the amount that they will lend and you also need to know how much you can cope with borrowing.
How much do lenders lend?
There is no hard and fast rule about how much payday lenders will lend. However, most will not lend over £1,000. This is because they are taking a risk by lending without doing credit checks. Although this was the reason payday loans were set up; to give those with a poor credit record the opportunity to borrow money, it does not mean that they will not protect against the risk of doing this.
They will also not always lend the full amount to everyone. If you are a first-time borrower then they may decide that they only want to lend you a few hundred pounds. They may want to see how well you repay that before they are prepared to lend you larger amounts. This could mean that you will not be able to borrow enough.
However, if you compare different lenders then you may find that they vary in the amount that they are prepared to lend you. It can be worth checking with several and seeing which ones will be willing to lend you the amount that you need. You may need to contact their customer services department in order to find out this information as it is unlikely to be easy to find on their website. This could make the application process a bit longer as you will have to do this research first but it will be worth it as you will know, when you apply, that you will be able to get what you need.
How much can I afford to borrow?
As well as looking at how much you need to borrow you also need to look at how much you can afford. It is really easy to just concentrate on getting the money that you need without thinking about the consequences. It is really important to also think about your ability to repay it.
To start with you will need to work out exactly how much you will need to repay. You will be able to calculate this using the lenders website. They should have a calculator on the site where you can enter the details of the loan you want such as how much you want to borrow and how long for and you will be able to then be given the figure that you will need to repay. This will include the amount you borrowed and the interest and any fees that you will have to repay as well.
The loan will be repaid on your next pay day. You will need to calculate whether you will be paid enough to cover the cost of the loan. Check what other direct debits you have coming out of your checking account and the amount of pay you are expecting to ensure there will be enough. If there is not enough available to pay it, you will have to pay extra charges and so you will need to be really careful to make sure that the money is available. It is also important to think about what you will need to pay out for through the month and whether you will be left with enough money to do this once the loan is paid off.
So you can see that how much you will be able to borrow will depend on the lender. Not only do different lenders offer different amounts of money, but some may be prepared to lend more than others to you. If you are a first-time borrower then they may not be prepared to lend you that much until you repay a loan in full and they know whether you can cope with repaying it. It is also important to make sure that you will be able to afford to repay the loan. The more money you borrow, the more you will have to repay and the higher the cost of the loan will be. So, you need to make sure that you do some calculations to ensure that you will be able to afford the loan. So carefully calculate how much you will have to repay and look back over past bank statements to see whether you feel that you will have enough. If you do not normally have that much money available then consider whether you will manage and if you should consider ways to cut down your spending or to earn more so that you can cope with repaying the loan. If you feel that this will not be possible, then you will not be able to borrow the money unless you are prepared to pay extra fees for late repayment.