So, you had an urgent need for instant cash and applied for a payday loan, got approval for it and made use of the loan amount to pay off an urgent bill or meet an emergency need. Now, since that urgent need was met with instant cash, you need to prepare for the next step, which involves paying off the payday loan. If you are able to pay off the loan amount with your next paycheck, it is absolutely fine, but what if you can’t? What if you find out that you will not be able to pay back the loan amount on time? What do you do then?
Making loan payments is important and with payday loans, it is mostly a one-time complete payment on the decided time at the confirmed rate of interest. But if you are unable to pay back the loan on time, how do you deal with the situation? Since payday loans are different from regular bank loans, it is important to know all about payday loans before you opt for them.
If you aren’t able to make the payments on time, don’t panic. Try out the following tips.
Get In Contact With Your Payday Lender
Don’t stay silent on the issue. As soon as you realize that you won’t be able to pay off your payday loan amount, just tell your payday lender. The reason for this is that by law, your lender is required to treat the borrower in a fair manner and allow reasonable time for the repayment of the loan. This may also include suspending charges and the freezing of interest rates.
The lender is also required to suspend all recovery of the debt amount for a reasonable period of time if any borrower is trying to develop a repayment plan on their own or with the help of a debt advisor. Also, the lender is also required by law to accept small token payments if you can prove that you are hard up to pay for some of the basic daily essentials.
The lender will also not trouble you with many emails, phone calls and texts about loan repayment, once you have notified them about the situation.
Cancel the Process of Recurring Payment
If you are not able to meet the daily life expenses of food, utility and rent, then you can contact your bank and ask them to cancel the option of recurring payment which allows the lender to draw the loan amount from your account.
It is important that you do this at least one day before your loan payment amount is due. Also, make sure that you inform your lender as well about the situation and how and why you have cancelled the recurring payment option.
It is very important that you note down the exact date and time on which you instructed your bank to cancel the option of recurring payment. If any amount is then drawn by the lender from your account, you will be entitled to a complete refund by the bank as per law.
Also, it is a good idea to keep a record of all the emails and contact you had with your lender about notifying them of your situation.
Don’t Roll Over The Loan – Seek Debt Advice
Your lender will advise you to roll over the loan for maybe another month or so, but it is not a good idea since it will mean more interest and charges, with you ending up owing more money than before! What you need to do is seek debt advice from a professional and develop a repayment plan which you can easily afford and then discuss it with the lender.
Make sure that you heed the above tips or read some quality payday loans info if you are not able to pay back the payday loan amount on time.