There are many payday loans available these days. While it is good to have a lot of competition in the market, so that process is more competitive, it does mean that it can be really hard to decide which one might be the best to choose. There are different criteria that you can use to judge as well. These can be different for different people but it is worth having a look to help you to think about what might be important to you in a loan and a lender.
Many people will compare the interest rates of the different lenders and use that as a way to compare them. If you feel that the cost of the loan is the most important factor then you may decide that you will just go with the one with the lowest interest rate and think that you will then have the cheapest. Although interest rate can be a big factor in the cost of a loan it is worth understanding how the interest rate works. With payday loans interest rates can potentially be the APR or the AER. The difference is quite significant. The APR is the Annual Percentage Rate and is how much interest is charged on the loan. The AER is the Annual Equivalent Rate and that is not just the interest but also allows for any fees that are also charged. This means that if the lender charges interest and an administration fee then both are included in AER but not in APR. This means that if you compare two lenders interest rates but one is APR and the other is AER you may pick which you think is the cheapest but actually it is not as the rate does not allow for other fees.
This means that if cost is important to you then you will be better off calculating the actual cost in monetary terms of the loan. This sounds complex but it does not have to be. Most payday loan websites will have a calculator where you can enter the amount that you wish to borrow and how long you need it for and it will tell you how much you will need to repay. If you make this calculation on different sites it will allow you to compare them and to work out which will be the cheapest for you. If you cannot find a calculator or find that it is not easy to use then you can contact the customer services department and they will be able to let you know.
It is also worth being aware that if you do not repay on time you will be charged extra money. This happens with all loans and it is important to make sure that you are aware of how much those charges will be. These could vary quite considerably so it is worth finding out. You might find it tricky to see ow much these are as they tend to be in the terms and conditions of the loan which can be long and difficult to understand for even the most legal minded person. This means that it might be the case that you will need to ask customer services about this. Even if you feel confident that you will be able to repay the loan, it is wise to make sure that you are aware of these costs. It can even help to motivate you to make sure you do repay on time but also allows you to more easily choose a lender.
It is also very important to understand how the repayments work. Many payday loans will have just a lump sum repayment. You need to work out whether this is something that you will be able to afford. For some people repaying a lump sum and interest will be easier than for others. You will repay on the day that you are paid, which will help, but you may also need to think about whether you will manage to pay all of your other bills and costs as well. It is wise to do some calculations and work out how much money you have coming in and how much you need to pay out to se whether you will have enough. If you do not then you will need to think about ways that you can manage your money better so that you can manage. Fixing a tight budget can help, but also comparing prices to make sure that you are not paying more than necessary for things. You can also cut down what you buy if you do not only buy essentials. You may also be able to think of ways to raise money by earning a bit extra of selling things that you own already.