Tuesday, November 26, 2013

Finance for People Over 50: Using Payday Loans

Payday Loans Neon Sign
If you are currently retired, you know that money can be scarce especially if an unexpected expense comes along. In this case, you may be tempted by the many payday loan ads around the place offering quick money straight to your bank account. Before you sign a contract though, you should be aware of a few qualities of these credit options and how they affect you as someone who’s over 50.

Know When Payday Loans Are Useful



In general, these types of loans are given for short periods of time at comparatively higher interest rates. Since you’re only borrowing money for a few weeks though, the added fees or charges may seem affordable and easy to pay back. This doesn’t mean that they should be used for any expense though, especially for senior citizens who have a limited income in the first place.

Instead, you should only get in touch with a payday lender if you have a one-off, absolutely critical situation that you really can’t cover using any other method. If you keep in mind that payday loans are only suitable for emergency situations, you’ll then have a better chance of reducing the risk while still covering your expenses. This is vitally important for retirees who may not have much spare cash to play with.

Determine Whether You Can Afford It



Payday loans work by your lender automatically withdrawing money from your bank account on a pre-specified date. This means you should always make sure you’ll have the necessary capital and thus avoid bounced checks or further financial difficulties. Before borrowing money, consider the following:
  • How much of your next pension payment do you need to spend?
  • How much do you thus have available to pay off your loan?
  • Do the loan conditions fit in with this future financial situation?
Sit down and create a budget (or get your children to help) and you can then get a better grip on your monetary future. In this way, you can safely choose whether you can then afford that payday loan or not.

Compare Several Different Lenders


If you’ve decided the situation is an emergency and that this credit option is the only solution, you should then do your research on a number of firms prior to signing a contract. You can compare plenty of short term loans here on the internet, an easy option for those over 50 who may not want to leave the home. If you’re unsure of how to use this technology, get your son or daughter to help you. When browsing over the details, don’t forget to look at the following important factors:

  • The APR of each payday loan
  • The charges you have to pay
  • The length of the credit term

Remember that you’ll still need to control your finances as tightly as possible despite the fact that you want to borrow money in this manner. Thus, always take things slowly and compare what’s on offer so you can make a smarter financial decision.

Make Sure You Understand the Contract


When poring over the conditions that the lender provides, never settle for them unless you’re completely sure about what you’re agreeing to. This means you should be fully aware of the loan terms including interest rates and repayment periods. If you have any doubts, always ask the lender to clarify their requests. You might even be able to negotiate the conditions if there’s anything that you don’t like. If you understand everything that’s written, you’ll have a better chance of adjusting the contract so you get a better deal. Remember that your lender will be legally obligated to ensure complete clarity. If they talk about their payday loans in obtuse terms and refuse to answer in simple English, it may be time to move to another financer who is more honest and reliable.

This advice should help anyone over 50 make a decision about payday loans and then seek out a lender who actually offers a great deal. If you experience financial difficulty and your pension doesn’t cover the costs, you now know exactly who to contact when it comes to taking out one of these short term, personal credit options without being lumped with excessively high rates, fees and charges.



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