subject: How Early in the Month can you get a Payday Loan? [print this page] How Early in the Month can you get a Payday Loan?
A payday loan is a classic example of a short term financing solution. It offers the chance for consumers to get their hands on a sizeable chunk of cash, under the strict agreement that it is repaid when they next receive their salary. This time sensitive proviso means that most loans are taken out for a matter of weeks or even just a few days before being paid out in full. But how early on in a month can you successfully apply?
Theoretically, and this certainly isn't recommended, you could apply for a payday loan on the first day of the month. As long as your repayment date is your next pay date, which could be upwards of four weeks in the future, this is absolutely fine.
Lenders may provide a little leeway, allowing an extra day or two over the month, but largely this is a strict limit. Everything will be arranged during the application process too, therefore you will need to select a repayment date and then adhere to this. Clearly, if this date is beyond the parameters of what the lender will accept, then you may not be able to get the finance you require with them - although alternative options may still be available.
The amount of time that you're looking to borrow money for can be a key factor in determining which company to choose too. Some will charge a standard interest rate based (often around a quarter of the borrowed amount), however others may offer payday loans on a weekly or daily interest rate. There are pros and cons for both methods, so a lot will depend on when you can repay.
Say for instance your car breaks down on the 5th of the month and you're paid on the last working day. If you don't have the money available and require a payday loan, one that charges a daily rate would probably offer pretty poor value, purely because of how long you'd require the money. So in this case, one that offers a standard rate of interest would provide the better solution.
If the tables are turned and you only need to borrow the money for a few short days, then evidently the reverse would be true. A flat rate charge would compare rather unfavourably to the more versatile daily alternative.
There is a distinct risk of becoming overly reliant on loans, which could see you racking up significant additional debt. This is particularly true if you are taking them out right at the start of the month and continuing to do so for many months. They should only ever be used in cases of severe financial difficulties and only where further financial difficult could come as a result of not getting a cash injection. Therefore if you are applying for a loan just a few short days after you have been paid, it could be an indication that you have wider issues that need to be addressed - preferably with a long-term financial solution.
For this reason it is vitally important that you take the time to really understand what you're applying for before you take the plunge. Once you've been accepted, then you are committed. Early repayments may be possible, but more often than not there won't be much of a financial benefit in doing so.
Whilst there may not be a strict guideline on how early in the month that you are allowed to apply for a loan, there are plenty of other supporting factors that must be considered. So don't rush in, weigh up the available options and get yourself a good deal that will help steer you away from financial purgatory.
