Things to think about before taking a payday loan

Payday loans can be easy to get, and if you have problems paying the loan back the lender may offer an extension, known as a deferral or rollover.

This can seem like a great idea,  but in reality payday loans are only manageable if used for short-term borrowing (30 days or less). By extending your loan you will have to pay more interest and possibly other fees. You could be left with an unmanageable debt as the costs can quickly increase.

You may also find it easy to get another payday loan from a different company at the same time (and use one to pay off another). This can lead to debts that grow very quickly, so it’s important that you avoid taking out more than one payday loan at a time.

If you have paid off your payday loan, you may find that the company contacts you again and again with offers of more loans (because it knows you are a good customer). This can be very hard to resist.

You should bear in mind that even paying a payday loan in full, on time, could affect your ability to get a mortgage in future: some lenders won’t accept applicants who have used payday loans in the past.