Many people might take on a short-term loan because it does not last long. However, they do not always last exactly the same amount of time. This means that you still might wonder exactly how long they will last. There is no definitive answer as it will depend on the lender so it is good to investigate this if it is something that is important to you.
Payday loans are repaid in a lump sum. This means that they are repaid in full all at once. They are also paid when you next get paid. A direct debit is set up so that the repayment will leave your account on the day that you are paid. This means that how long the loan lasts for will depend on how close to your pay day you are. So, it could be that you have a good few weeks until you are next paid or just a few days. In theory the loan could last anything from 1-31 days.
With instalment loans the repayments are over a few months. It is not repaid in a lump sum but spread over a few months. The amount of time will depend on the lender. It may also depend on how much you borrow. IT is not even easy to make a guess as to how long it might be, but it is certain that it will be longer than a payday loan.
There is another factor that will determine how long a loan takes to repay and that is whether you manage to repay it on time. Obviously, there is a due date with a loan which is when you should repay it. However, it is possible that you will not have enough money to cover it and then the loan will last for longer.
As the repayment dates tend to be on the day that you are paid, you may just feel that you will have enough money available to repay it. However, this may not be the case for a few reasons.
If you have borrowed too much money it may just be that your income will not be enough to cover the repayment. If you borrow £1,000, for example and your income is less than this you will just not have enough to cover it. If you borrow an amount you think you can cover but forget to add on the extra cost of the fees then this could be a problem. It might be that you will not have enough money after all. It could also be the case that you have other money coming out of your account on that day and you will not have enough left by the time the loan repayment is due.
It is really important to do everything that you can to make sure that none of these things happen though. This is because if you do not repay on time, you will be charged extra money. No one wants this to happen. Even though there is a cap on how much you can be charged, you still do not want to pay more than necessary for your loan. There are things that you can do which will help you to make sure that this does not happen.
Firstly, you need to completely aware of how much you will be repaying and when. It is wise to either use the calculator on your lenders website or ask them and know for sure before you take out the loan. Then, you need to think about whether you can afford this. Make sure that you do not just think vaguely that you feel it will fine but that you actually check properly. Look at your previous bank statements and see what payments you have coming out of your account on the day when the loan repayment is due. This is likely to be the day that you are paid. You need to carefully calculate whether there will be enough money left to make the repayment. Make sure that you think about anything that you might have to pay that you have paid for a few months. You may have things you pay for quarterly or annually that might need to be paid.
It can even be wise to have a backup plan. What if things go wrong and you know there will not be enough money? What if you have taken an overdraft, for example and when you get paid, it will be paid off and there will be nothing left to repay the loan? You might be able to cut back spending elsewhere but it is probably easier to find some ways to make extra money. You might be able sell some things, do some freelance or temp work, earn a bit doing online surveys or tasks or things like that.