Managing your payday loan

Most of us have been in the situation when we're a bit more hard-up for cash than usual and an unexpected bill comes through the letterbox.

Payday loan companies are a great ally to have in these situations, but it's important to manage your loan appropriately to ensure you can pay it back on time.

Those who don't pay their loans back within the prescribed deadline could find themselves subjected to fines as well as extra interest. It's an easy way to find yourselves in a debt spiral that is very hard to climb out of.

Your payday loan

The first step to efficiently managing your payday loan is make sure you know how much money you have to give back and when. Most lenders allow customers the flexibility to choose their repayment date and will make it clear how much interest is due on their money. Keep these details somewhere safe.

Ideally you will have arranged to repay the money as soon as you have enough in the bank to do so. This way, you can avoid paying unnecessary interest.  

Avoiding penalties

If you find yourself unable to repay the loan on the specified date, it's not just additional interest that you will have to pay. Most payday loan contracts specify that the customer will be issued with a charge as well. That's the last thing that anyone who is already struggling pay their bills needs, so it really is important to be careful with your cash until the loan is paid off. It's worth double-checking that a payment is arriving either on or before the date of repayment. If not, it's likely to be financially worthwhile making alternative arrangements to ensure you do have the money to pay it back.

Customers can learn about the fines they face by reading the terms and conditions of their loan. It could substantially increase the odds of a customer needing to use a payday loan company at the end of the next month.

After the loan is paid back

Once the loan is paid back, it could be sensible to make a note of how much money you have left to play with until the next pay cheque comes in. If it's less than normal, then take the time to draw up a budget and ensure that you don't end up in a similar financial predicament at the end of the month again.