Affordability is always so important on finance, if someone borrows finance from the financial market place and it is not affordable then the chances are repayments somewhere will be missed. Missing loan repayments and on other finance will nearly always result in severe negative consequences for that person involved and most people will always want to avoid this from ever happening if at all possible. Whether someone has taken out and borrowed short term loans such as payday loans or possibly instalment loans or even credit cards typically over longer periods the debts must be repaid. They have to be repaid as agreed with the lender in the first place. Below is steps on how people can check the finance is affordable but also how some borrowing types is more affordable than others.
I personally have found that if someone can locate what their disposable and spare income is on a monthly basis on average they can test whether further finance is affordable for them to maintain. People will often know that this income amount can vary from month to month however, it still should always provide a good understanding as to whether the finance is affordable overall. A person can locate the figure by looking to any month coming up ahead, they can then add up all their income expected for that period. This can include their work employment salary, any benefits they are due or credits etc. All credits due for the set period of time must be listed here. Then from that amount the same person over the same time frame can deduct all their outgoings. This can then include their mortgage/rent amounts, any debts they may have, any transport and food costs for that period must also be listed with all other expenditure and everything must be include. The figure left after this calculation is the spare and disposable income. It is that amount that will be used to see if finance is affordable. If someone has a high disposable amount then they are far more likely to be able to afford any short term loans or other finance.
It can be common that there can be a high number of different borrowing types that are more affordable and realistic for someone to pay than others. Take the short term payday loan for example. When these are borrowed by someone, that person must repay the debt back just as soon as they are paid again from work and they have to repay the loan in full. For any person repaying a loan in full may not be easy and high interest is normally charged on payday loans making them that extra bit harder for certain people to repay. Apart from the full balance being due on these loans the other borrowing options are then limited. People therefore when borrowing payday loans have to repay these loans in full as well as maintaining their other financial commitments and this is just not realistic for them and payments can then be missed somewhere as a result. There can certainly be other borrowing options that are more affordable than that of payday loans.