Payday Loans and the Importance of Budget Planning

When it comes to budget planning the importance of this resource can be positively applied to all elements of an individual’s financial concerns. A budget is such a simple tool but has been used for decades to help not only individuals but of course larger financial delivers to understand exactly where, in simple terms; money is being spent. Focusing on the needs of individuals for the purpose of this discussion, what is clear is that using and maintaining a healthy budgeting plan can lead to all sorts of benefits. Aside from the obvious which is its ability to help us manage of money in a more formatted manner, budgets can also highlight to us where we are over-spending and furthermore where savings can then be made. Today we will be looking how a budget can provide useful insight when considering a new form of borrowing and in particular; payday loans. As well as this we will look at how to plan budgets successfully and the benefits of doing this.

Payday Loans

Payday loans are a way of borrowing just a small amount of money over an agreed period of repayment. The loans in question usually start from £50.00 but can see customers borrow up to £500.00 in some cases. The terms of repayment being offered for payday loans are flexible, thanks to installment based borrowing being offered, with terms of repayment starting from just a single month and extending up to 6 months. As such if considering payday loans, it would be useful to research the choice and selection which is available. In addition to this research a view of your budget would help the decision make process. If you have never used a budget before, worry not because it’s really easy to do. To complete your budget firstly you must list all of the outgoings you have for the coming month ahead; which is why it’s best to formulate your budget at the beginning of the month. This means taking into account all of your living costs being perhaps rent, bills, travel costs and food as well as any other financial commitments you have. Aside from your living costs be sure to list any other costs you have coming up for the month, such as birthdays. Once you are sure you have accounted for all your costs you can then deduct the total from your known income for the month. The amount which is then left over is your spare income and therefore is disposal for to spend.

It is from this disposable income that you will need to account for your proposed payday loans repayment. With this in mind it would be sensible then to select a repayment term which reflects what is affordable to your spare income. Again be mindful to account for whatever else you use your spare income for, whether this be cinema trips or drinks with friends to give just a few simple examples. It is vitally important that the loan repayment for a payday loans resource is affordable and this means making into account any and all the things you spend your money on.

What a budget can also do then is highlight exactly where you are spending all of your money each month and where perhaps savings could be made. Take for example the amount being spent on food each month, is there room here to make reductions. Many of us do not always keep track of how much we are spending on this particular expense but often it can be one of our biggest costs. Say for example you are having a weekly take away on a Friday, spending £20.00. This means over the course of the month you could be spending as much as £80.00 a month and cutting this down by half would mean a saving of £480.00 a year! Applying this logic to each and every area of your budget will help ensure savings are made wherever possible to do so. Calculating the savings which could be made on a yearly basis will undoubtedly spur you on to maintain the reductions you have committed to and make the rewards that little bit sweeter.

The Application Stages of Payday Loans

When applying for payday loans we can expect a number of stages and checks to take place. These checks are all designed to ensure the loan being requested is suitable and affordable. Lenders of payday loans are governed by the FCA and as such, must conduct their service in line with the FCA’s rules and regulations concerning short term borrowing. The application process, from the point of view of the borrower is actually very straight forward and this is thanks to the online based application form. In the vast majority of cases payday loans are applied for entirely online. This means completely the application can often be done in a matter of minutes. In addition, most lenders have websites which can adapt to fit the display of any internet enabled device, whether this be a Smart Phone, laptop or tablet for example. This means the screen view will be clear and easy to follow and complete on most devices. Once the application is submitted, most lenders will aim to deliver a decision in a timely manner and without the requirement for any further input on the part of the applicant. That said, there can be instances for any payday loan lender where there is a requirement for additional information or documentation to be supplied. Today let’s take a closer look at the stages which are standard when applying for a loan like this online.

As we discussed above in order to be consider for a payday loans resource the first part of the process is that of the completion of an online application form. The form itself is usually broken down into several easy to follow stages, gathering your personal information, your employment details and of course your banking information. Once all the required information has been inputted the application can then be submitted to the payday loans lender for review. In order to effectively asses the application, in line with both internal and external rules and guidelines, lenders will usually complete a series of both electronic and electrical checks. This means the details supplied in the application will be reviewed and assessed in two different ways. In most cases the electronic checks will look to verify core information of the application, such as your identity, address and bank account information. In more recent times these electronic checks; also known as a Decision Engine, will also look to assess your credit worthiness and therefore ability to afford the loan requested. Providing the electronic checks are passed to the required standard, this is usually when manual checks of the application will take place. These manual checks will not only ensure a human eye has seen the application before a decision is made but may also give the opportunity to request further information or documentation, should it be needed. Other manual checks will likely look to validate the employment information supplied in the application to be accurate and also make sure budgeting information appears sensible and in line with all the other information which has been supplied in the application form.