You may be familiar with the ability of payday loans to help in an emergency. But do you know these loans could help save money? Shocking, right? Yes, you can save money with income-based loans. The blog lists the best ways to fill up your pocket. If excited, just read ahead.
Let’s first begin with the basics.
What does a payday loan imply?
It is a short-term loan ideal for small emergencies. As the name suggests, “you can repay the amount on the next “Pay-day”. It requires no collateral or a guarantor. Instead, you get the loan solely on your repayment capability. Individuals with good incomes and stable finances get instant approval. The maximum payout amount is €1500. You may use it for any short-term purposes like urgent medical consultation or car repair.
The interest and APR remain competitive on such loans. It is due to the lender’s risk involved. High Apr implies more payment after loan completion. Thus, one should seek one only with a stable income and monthly savings. It helps settle the dues quickly. Moreover, as the payout amount is low, you can repay one-off payments easily. You can also choose a repayment period if you cannot pay on the salary day.
How do Payday loans help you save money?
Many loan borrowers don’t realise the benefits of payday loans. One must know the pros and cons before applying. It helps you decide what is right for your finances.
For example- if you need €1000 urgently, you check income-based loans. Surprisingly, you find €200 in savings. Now, you just need €800 more to cover the gap. Hence, you borrow less, and costs drop. Similarly, analyse your finances before seeking a loan. Here are other ways a payday loan helps save money:
1) Help save at least£25 on late payments
Individuals with pending credit card or overdraft fees pay €25. The authority charges a late fee. You may lack the money to settle the dues now. However, delaying the credit card payments may make you pay €12 extra. It is a flat fee in Ireland and the UK. These costs may vary from provider to provider.
However, paying the minimal payment may save you. In that condition, you pay less. A payday loan may help you with that. Check the loan and get the minimum amount. Showcase your valid earning proof to qualify. This move may save you from attracting unnecessary costs.
Compare the best payday loans in the Ireland marketplace. Check loan APR (Annual Percentage Rate), interest and other costs. Beware of the hidden fees. It may affect the total amount to pay. Choose the one with the lowest APR and costs. However, your income should be strong enough to get through.
2) Capped interest saves extra expense
According to FCA (Financial Conduct Authority), the regulatory body in the UK, “Borrowing £100 would never cost you over £24 in interest.” It is if you can repay the amount in a month. Moreover, you never pay double the amount after borrowing. A similar rule may be valid in the EEA or EU nations.
For example- if you borrow €600, you don’t pay over €1200. It is only when you don’t skip the payment or pay late. Alternatively, the late fees and missed payment penalty may increase the total repayable loan amount. Thus, try to analyse the least amount to borrow.
Check whether you can meet the needs within that. Also, analyse the potential to repay timely. Don’t apply if you are not confirmed to pay within the deadline. It may affect your credit history then.
3) Apply with the direct debit option
It is one of the best ways to save money on payday loans. Most loan providers offer the facility to first-time loan seekers. You may get a discount on the total loan costs or fetch affordable terms. It is regardless of the credit history you share.
The direct debit is a Continuous Payment Authority system. This works only on debit cards with the direct debit facility. For example, you may use the facility to auto-cut payments related to utility bills, subscriptions, etc.
Similarly, setting direct debit for loan payments proves beneficial. You may cut loan costs significantly. Moreover, direct debits help ensure regular payments. It keeps you on top of your debts. Hence, you can gladly skip missed payment fees or penalties.
4) Early repayments- the biggest saviour!
Have you heard about saving interest by overpaying on a loan?
If yes, you are not dreaming. It is a real thing.
Payday loans are one of the most expensive yet flexible loans. They are popular among youth and adults alike. Easy accessibility, no documentation or stellar credit attracts borrowers. If you couple it with an early repayment factor, it’s the best!
However, only a few direct lenders in the Ireland space offer the option. It is because of the low amount and repayment tenure. It is easy to budget for the one earning just €6000/month.
Explore the loan organisations for overpayment facilities. It may help you save on extra interest costs. You can even contact LoanstoPocket experts to know your early payment options. Financial lenders and experts help individuals with personalised assistance. You can trust the firm with finances. However, approach early to understand the options and pay accordingly.
5) Consolidate debts to free up the amount
Most individuals struggle to settle their loan dues in a timely manner. It could be due to financial issues or emergencies. Non-repayment attracts penalties and interest rates. Moreover, it may invite legal action from the lender. If you are down multiple debts, solve this.
Consider the best way to settle the dues quickly. You can either seek a debt management company or pay individually. The latter is a better option if you know your finances better.
Check the best payday loans to consolidate the debt. Yes, you can use it to merge your debts, too. However, you can only consolidate a debt type. For example, you can repay your overdrafts that are due. Calculate the total amount and merge it into a single payment. The amount to pay should be less than €1500. It will simplify your finances quickly. Moreover, this action improves credit scores and the potential to qualify for loans.
Bottom line
Thus, do you like these tips to save money on payday loans? Which of these are you going to try first? Comment. Payday loans are short-term financial facilities for emergencies. You can use it to finance critical needs under cashless situations. Identify the loan costs, APR, interest rates and other costs. Check the potential to settle the loan in a timely. Identify the existing risks and overcome them before applying.
Caleb works as a senior content writer at Financealoan for the past 3 years. He is a writing enthusiast and invests a good time in exploring and writing about financial trends. His keenness in exploring a topic to create a research-based piece is simply unmatched. He believes in including a texture of authenticity with real-time examples and facts.
Caleb’s blogs and articles reveal deep-seated knowledge and expertise. His educational qualification forms the base of his excellent command over the industry and Jargon. He is a postgraduate in Finance and is currently involved in exploring the world of the stock market.
