In recent times, it has become difficult to watch TV, listen to the radio or even browse the internet without being bombarded by adverts for payday loans. You might be tempted by this seemingly easy way to get cash fast, but before you sign on the dotted line, think carefully about how much it might cost you in the long run.
Check the interest rates!
Payday loans can charge an eye watering level of interest, in some cases up to 5,000% APR. This might be manageable if you are able to pay the loan back in a very short space of time but if for whatever reason you can’t, your charges can spiral very quickly.
Payday loans can harm your credit rating
This might not only affect your applications to borrow larger amounts of money, such as a mortgage or personal loan, but can also impact on your eligibility for mobile phone contracts, car insurance or extensions to your overdraft facility.
So what can I do instead?
Sit down and have an honest look at your incomings and outgoings. What might you be spending too much on? Where can you make some savings by cutting back, changing providers or using discounts? Try using the online Warwick Budget Calculator to help you with this process. You might find the answer to your money problems here.
Are you getting all of the financial help you are entitled to?
If you are able to, part-time work can be a great way of boosting your income and gaining some really valuable experience. Try Unitemps for job opportunities on campus and in the local area.
What can you give up to cover the cost?
- Do I need it?
- Can I afford it?
- Can I get it cheaper elsewhere?
If the answer to any of these questions is ‘no’, think really carefully before you buy.