You probably have several questions about taking out a payday loan. Like, how much can I borrow? In this post, we’re letting you know just how much.
Have you ever thought, “What are payday loans? How much can I borrow? Will they actually help me?”
If so, then you have come to the right place.
If you find yourself short of cash to cover emergencies or unexpected bills before your payday, then know that you aren’t alone.
By applying for this type of loan, you can easily receive up to NZ$ 500 with affordable repayments to help you get through any difficult situation.
Use our guide below to see if payday loans are the right fit for you and to determine how much money you may actually borrow based on your situation.
To successfully answer the question, “How much can I borrow?”, in regard to payday loans, then you need to first understand what they are and how they work.
What They Are
Payday loans are cash loans that you can take out but have to pay back on your next payday.
They make up a short-term, unsecured lending option that has grown in popularity in recent years. A small amount is borrowed in the form of cash, with a high rate of interest attached to it.
Payday loans can be very useful if you experience cash emergencies in between paychecks, that may arise unexpectedly. Cash flow problems can happen to anyone, so these loans are designed to help people pay for the unexpected.
Payday loans are quick and easy to acquire to help you get back in control of your situation, as soon as possible.
How They Work
If you need a payday loan, then you need to send in an application to a loan business as soon as possible.
Most of the time, you will have to meet certain criteria in order to get credit, and many allow this to be fully completed online. This can range per company, but generally, you must:
- Be over 18
- Be a New Zealand citizen or resident
- Not be bankrupt
- Be in ongoing employment
- Have an active bank account
After applying and determining how much you will need, you may have to submit previous statements depending on if this is your first loan.
Upon that, you should inform your employer or payroll officer of what is being done to your paycheck, and then you can go on your way. It should be noted that the application process can generally be completed within a day.
How They Are Regulated
Payday loans are a legitimate credit option, so there are certain laws and regulations that you are abiding by when you pursue this lending method.
In New Zealand, the Credit Contracts and Consumer Finance Act 2003 regulates the payday loans for responsible lending practices. Refer to that legislation if you are looking for documentation or encounter a problem.
How to Find the Best Payday Loan
If you want to know the answer to “How much can I borrow?”, then know that it truly depends on the company you are applying to.
Make sure that you pick a registered lender with an excellent reputation, so you don’t encounter problems or mistakes.
Generally speaking, you will be able to borrow between NZ$ 100 and NZ$ 1000. First-time applicants may be subjected to a limit, around NZ$ 300 to NZ$ 500, in the beginning.
You may only borrow as much as you need, and you will have to establish how much time you will need to pay them back given the interest and fees unique to your situation.
When taking out payday loans, you generally have 7 to 45 days to pay them back.
What to Watch Out For
When answering the question, “How much can I borrow?”, then you must also understand the problems that may arise when you do borrow through payday loans.
Shorter term loans can be very helpful because they can save you money in the form of interest. However, with longer term loans, you receive more time to come up with the amount of money you have to pay back.
Many Kiwis are currently struggling to pay their payday loans, with many facing up to 6 times the amount of the original loan.
Don’t let this happen to you.
The interest rate is high with this type of loans. You have a pay period to pay it back, but if you can’t do that, then the interest rates can rise very rapidly.
Just a few ways to protect yourself from high rates include always making sure that you:
1. Determine How Much You Want to Borrow
Never borrow more than what you need so you are always able to pay it back at the end of the period.
2. Think About What You Really Need
These loans do carry a higher interest rate, so make sure you’re in a serious situation that requires this type of help.
3. Choose Your Lender Wisely
Make sure you do your research so you don’t fall victim to a scammer.
4. Know Your Interest Rate
Always look into the interest rate beforehand, so you make sure you can afford it.
5. Know How You Can Use the Money
There aren’t instructions about how you are allowed to use the money but do remain responsible during this situation.
6. Ask About Penalties for Early Payment
Not to mention, some lenders will charge you a high penalty fee if you pay your loan off too early, so make sure you do your research in regard to that as well.
Are You Wondering, “How Much Can I Borrow?”
Now that we have discussed the question “How much can I borrow?”, you may desire answers to similar questions in regard to lending options.
If so, then contact Pretty Penny Loans today.
Pretty Penny Loans are specialists in short term cash advances, up to NZ$ 500.
Our competitive rates and quick and easy application process give us the edge over our competitors. We know that situations arise when you may need an extra financial boost.
We work hard to ensure that applicants are constantly getting approved and receiving funds on the same day.
We will do our best to help you in any situation and to treat you with respect and trust, no matter the circumstances you may be in.