What if I Can’t Pay Back my Payday Loan?
Everybody has difficult times but payday loans help to provide the necessary cash when you need it most. Unfortunately, even some people who take out payday loans have difficulty paying them back at times. If you take out a payday loan and need some extra time to pay it back you do have options. Depending on the state where you live as well as the various limitations in place by the particular lender whom you take the loan with, you could have additional time to pay back the loan in the event that you are unable to with your following paycheck.
If you can’t pay back your payday loan on the following payday when your loan is due you should begin by talking with the lender about the other options that are available to you. For instance, some payday loan lenders will provide you with an extension to provide you with additional time to pay the loan back. Most lenders have the ability to extend the due date of your payday loan but keep in mind that extensions will be costly in terms of additional finance fees and the interest rates that are charged. Additionally, when you extend a payday loan you will also incur late fees which can quickly add up so it’s important that you never extend a payday loan unless it is absolutely necessary.
If your lender will not extend the terms of your loan and give you a new due date that is in the future, then you will likely have to pay the loan back and then take out an additional loan to make up for it. For instance, if you have a loan out for
$200 and you owe $250 then you can pay back the $250, then take out a new loan for the $200 or $250 and pay back that loan at a future date. Unfortunately, this rolling of a loan is how many people find themselves stuck in a position that makes it difficult for them to get out from under payday loans.
The moral of the story? First, don’t take out a payday loan unless you have a plan to pay it back and you have an idea of how you will be able to afford to pay back the loan plus any applicable fees and finance charges that accompany the loan. If you can’t pay a loan back, consider getting an extension to help give you more time to pay it back but make sure that you have thought about what you must do to make this happen.
Remember that a loan which goes unpaid can have costly consequences which vary depending on your lender, the amount of the loan and the state in which the loan is taken out in. For instance, some states allow your check to be submitted to the State Attorney’s office for prosecution in the event that you do not pay the loan back. Other states allow the lender to garnish wages, press criminal charges against you or take the unpaid loan case up in civil court. Some lenders have the right to report the unpaid loan to credit bureaus and in some states only one cash advance can be outstanding for an individual at a time which means that you will not be able to take out another payday loan until the first one is paid for.
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Category: Payday loans