If you are looking for a short term loan but you are worried that you will be able to repay the loan in full on your next pay date, an instalment loan may be a better option for you than a pay day loan.
An instalment loan allows you to borrow a small amount of money, in the same way that a pay day loan does. You can expect a high interest rate as you would with a pay day loan, however the APR on an instalment loan is slightly lower. Despite the APR on an instalment loan being lower than that of a pay day loan, you can still expect to pay roughly the same amount of interest. This is due to you borrowing the money over a longer period of time.
When you come to borrow from an instalment loan provider, you can select the amount you want to borrow and then decide on the time frame that you want to pay back the loan. The quicker that you pay back the loan, the less interest that you will pay. Look carefully when you do this, as it can be tempting to opt for the lowest monthly repayments. This can cost you a lot more money in the long term.
Before making this decision it is a good idea to work out your monthly budget so that you can ensure you can afford the monthly repayments. It is also important to take into account certain bills that may come up during the loan duration for example car tax or quarterly bills, bills that you do not pay every month.
When applying you will notice that by decreasing your payments and extending your loan term could cost you a lot of money.
Here is an example of what you would pay with one of the instalment loan providers in the market. Bare in mind that this will change depending on your chosen lender.
If you were to borrow £500 over 6 months, you would need to make 6 payments of £122.38 with a total repayable of £734.28. However if you were to extend the loan term to 8 months, you would need to make 8 payments of £94.63 meaning that the total repayment is £851.67. This means that by paying £27.75 less each month, it is going to cost you £117.39 more in total.
If you are happy that you can afford the monthly repayments and would like to apply for a loan, Sandy Beach may be able to help you. Our services are completely free of charge and the money could be in your account today.