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Published 2018-06-29 09:00:00

Donít Choose Payday Loans with Longer Terms if you can Repay Sooner

Payday loans can have a repayment term of anywhere from a month to eighteen months. Most lenders in the network of Cash Carrot will offer you a few months to repay their payday loans. A longer term may be desirable in most cases. A longer repayment period will effectively reduce the installment to be paid every month. However, it would also increase the cumulative interest. Some borrowers will have to go for a longer term because of their income and existing financial commitments or liabilities. Many applicants have prevailing debts.

If you do not have prevailing debts and you can afford to pay more as the monthly installment, then you should always go for a shorter term. Accepting payday loans with longer terms will cost you more in interest and you would not be able to get any benefits if you choose to repay sooner. Traditional loans usually have some concessions for borrowers who repay the remaining loan amount before the end of the term. Some lenders may respond generously but they are not obligated to do so. Even if you repay sooner, say a month or two early, the total amount due may still be the same. You may still be liable to pay the entire interest that would have accumulated by the end of the original term.

When you get quotes for payday loans, you would find the terms clearly mentioned. Some lenders will not negotiate this. Many may be receptive to hear from you. Discuss repayment term just as you would talk about loan amounts. Lenders are more stringent with their rates of interest and loan amounts. They are a tad flexible with repayment terms. Do the math and figure out if you have a possibility of repaying payday loans sooner. Choose a repayment term accordingly at the outset.

Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk