Payday loans are the simplest form of cash advance that you must settle on your next payday. When your payment attempts fail, you may well consider an extension from a reputable lender. Of course, the due date, associated fees, and loan amounts depend on the lender and your state of residence.
Your best shot is to call your lender’s customer service or apply online via their website and request a possible rollover. Above all, you’ll probably need to sign another agreement with altered interest rates and payment time. Expect to pay extra fees for extending the initial payday loan, too.
What Happens if You Can’t Pay Your Payday Loan?
If you thought a payday lender wouldn’t bother when you default on a 500 dollar loan, you were utterly wrong. No lender will waste precious time when your debt is due. Therefore, it is of utmost importance to repay your payday loan on time and in full.
If you’re late with your payments for any reason, your loan lender will initiate an automatic withdrawal from your bank account. Most loan companies have such rights reserved if you give them access to your account as part of the loan agreement. So, consider any funds you may have on your credit or debit card collected to settle any outstanding debt.
The worst thing about such attempts to withdraw money online is the fee most banks charge you. If you still owe substantial cash beyond the next payday, your lender will call you more frequently. They may even contact your reference relatives and friends to locate you faster. Expect to receive some letters containing threats and ultimatums from attorneys, too. Many lenders may sell your debt to collectors whose practices are rough and intense.
By law, failing to repay a loan debt is not a criminal act, so no jail threats should go through. Yet, many payday lenders file criminal complaints against borrowers and summon them to court for wage garnishment. Others may sue customers or report the delinquency to credit bureaus. However, never underestimate a court order and try to negotiate the terms of your loan. The worst outcome is a property lien, including the seizure of your possessions.
How Long Do You Have to Repay a Payday Loan?
Sometimes called cash advance loans, they generally have the same meaning, interest, and payment terms. Legit payday loans usually are due by your next payday, and that can range from 14 days to 35 days. Remember that you may get charged up to $30 for every $100 borrowed in the form of instant cash.
However, APRs, repayment terms, and the loan amount greatly vary by your state of residence. For instance, in states like Georgia, North Carolina, Arizona, and New Jersey, payday loans are not legal. In contrast, Hawaii, Maine, Texas, and South Dakota impose no loan terms restrictions. Still, taking out a payday loan will mean you need to pay back within 30 days in most US states.
The Fees and Hidden Costs of Extending Your Payday Loan
When you can’t execute a payday loan’s timely repayment, applying for an extension may seem a plausible idea. In this case, you need to inform your lender of your inability to execute payments and seek an extended payment plan. When approved, you’ll sign an amendment to the agreement outlining the repayment plan and all loan charges and hidden costs.
Pay attention to the difference between rolling over your payday loan and getting an extension. With a rollover, you may get charged an upfront fee to receive extra payment time. The terms of your agreement may undergo changes that include increased interest rates. With extensions, you obtain additional time to pay back the original loan under the identical terms from before. Still, don’t exclude the possibility of signing an amendment with a new payment due date.
Whatever your final verdict for postponing repayment, you’ll have to pay a fee to extend the due date. Due date extension doesn’t mean that the principal amount you owe gets reduced. On the contrary, the principal loan amount remains, and you must foot the bill of extra set fees in full. Finally, when you sign a payday loan agreement, always read the fine print to make sure you’re aware of all hidden costs.
How to Get out of Payday Loans?
Once you realize you can’t settle the debt on time, don’t procrastinate and find an alternative loan solution. Hoping that the debt will magically go away will drag you into a vicious circle of debt. The best strategy is to act right away and seek a plausible option to get out of debt.
First, if you’re not financially wise, consult a nonprofit credit counselor, an aid center department, or a bankruptcy attorney. They might advise what moves to take to avoid crossing the red line. Next, you may also qualify for community assistance programs that help troubled citizens with rent, utilities, and food. Think about asking a close friend or relative for immediate financial help, too.
Alternatively, turn to a credit union for a loan as they tend to offer lower interest rates. We also suggest you take pay or cash advance from your employer if that helps settle your debt in a less harmful way. Finding a side job or working overtime is another option to pay back owned money faster.
Last, you can consider some better-termed debt consolidation loans. Such loans can help you pay off the high-interest debt of advance loans and make your future payments less burdening. Covering debt with another debt is not an ideal solution, but there’s a chance you break free from payday loan rollovers.
Can You Be Served for Not Paying a Payday Loan?
Defaulting to settle your payday loan can have severe consequences on your financial position. You must realize that your payday lender can execute automatic withdrawals and wage assignments. In short, they start withdrawing funds from debit accounts, and each attempt to do so accrues more fees on your behalf.
Loan companies cannot reveal your financial situation, but they can send you letters from lawyers and call you ten times a day. Anyway, remember that failing to repay payday loans is not a criminal deed, and you can’t get arrested. So, if you receive arrest threats for not paying a loan in due time, defend yourself via your attorney service or department.
On the plus side, getting an extended date for loan payment can save you from much trouble. Full payment of any outstanding debt can boost your credit score and offer you a comprehensive service and product menu, too. Yet, the sum you’ll eventually pay will exceed the initial loan amount by far due to the high-interest lenders impose.
Our ultimate piece of advice is to think twice about repayment before you request a payday loan or an extension online. Consider payday loans only as a last resort solution as they include service fees, high-interest rates, and short payment time.