Can You Get a 3 Month Payday Loan?

Payday loans or same day loans as they are sometime known have proliferated over the last couple of years. This has been in part due to a growing need for instant cash advances quickly and simply.

Over the years, some borrowers have struggled to pay back the money on the date specified. This repayment date is set between the borrower and lender, and for payday loans, it is the date or near the date you get paid - hence why they are called payday loans.

When someone struggles to repay the money on the set date, they can talk to the lender to defer their repayment. Lenders don't like doing this because it puts the borrower at risk of accruing higher interest charges. Now some lenders are willing to help you repay the money, by letting you defer your repayment after a couple of months - thereafter though you need to start paying some or the entire loan off. This has spawned the need for what's known as '3 month payday loans'.

If someone struggles to repay a payday loan after one month, they may want to consider a 3 month payday loan. 3 month payday loans are very similar to standard payday loans, with the exception of the extra repayment time. However, considering the loan isn't going to be paid back until after three months, this type of loan will be more expensive than a standard one.

For example, most lenders operate with around a 1700% Annual Percentage Rate (APR). This can look quite daunting, but fear not, if you borrowed money from a payday loan company, this doesn't mean that you will have to pay back 1700% of the loan. In fact it only works out that you pay back approximately one quarter of the amount you borrow, i.e. you have to pay back an extra £25 for every £100 that you borrow. This is based on repaying the money on your next paycheck which can be up to one month after you apply for a loan.

Now let's consider a three month payday loan. If you were to borrow a similar amount, you will end up having to pay back a lot more than if borrowed from a standard payday loan company, because you ordinarily you would pay the money back within a month or so. This isn't to say that 3 month payday loans don't serve a purpose, but just that if you know you can pay the money back sooner rather than later, then it is best to use a payday loan company rather than a 3 month payday loan one.

If you need the extra time to pay the money back because you know that you have major outgoings over the next three months, then these types of payday loans are an unrivalled solution. Really it is up to the borrower to consider which type is more appropriate, but like with any lending solution, it is always better to repay the money owed as soon as you can, as this will prevent soaring interest charges.

Vincent Rogers is a finance writer who writes for a number of UK companies. For fast payday loans, he recommends Paydaypower.co.uk