Payday loans, cash advances, auto and car loans and payroll payments are all means to get fast money. Consumers who are in a financial dilemma can turn to one of these loans to help them pay for an unexpected cost or money. Some may take out one of these short-term fast cash loans to see them from paycheck to paycheck. And yet, some will borrow for unsettling reasons like buying a new handbag or big screen TV.
Whatever the reason for borrowing, payday loan lenders online and in store have made it easier than ever to get a loan that does not require a credit check, just takes a few minutes to apply and put your money directly into your bank account within one business day. It is no wonder that the borrowing rate on payday loans has increased over the past two decades. The burning question, however, is "As easy as getting money, how easy is it to pay it back?"
Typically, payment lender lenders require you to pay them back with your paycheck after you have issued a loan. Almost everyone can get a payday loan, provided they have a job, a direct deposit check account and meet the minimum monthly income. This in combination with the fact that the applicant's credit history is not a factor for approval, these loans are considered to be high risk. Thus, the lender's entitlement to charge high interest rates and fees.
So fast forward ... you have applied, been approved and funded and have since spent your party. Now is the time to repay. Will you be able to give back to the lender what they gave you on top of what they charge you to borrow the money? Perhaps that was not something you thought about when you clicked the "Apply Now" button from your computer. Your loan payment has now become part of your finances and needs your own place in your budget. If repayment of your loan in full with your next paycheck is not an option, consider the following in an effort to work your loan payments in your monthly expenses with the goal of paying it as soon as possible.
Talk to your payday loan about your refund options. You can "roll over" which means you extend the payment past the original due date. Most lenders will do this for you, but keep in mind that there will be high fees that are linked to your main balance. Ask about a payment plan. The amount and number of payments are determined by the lender. Some lenders may stop paying interest if you continue to make your payments on time.
Be sure to choose the payment option that works best for your budget. Do not tell the lender that you can pay your loan in full with next month's paycheck if it is not realistic for you. If the lender offers a payment plan you know you can not handle, request a reduced amount to ensure that the money will be available to the bank when they go to automatically withdraw it into your account.
Refrain from purchasing non-essential items until your loan is paid back. Important bills like rent, utilities, gas and food have to be paid, but money goes against something else that is considered a "wish" and no need should be held at the bank and added to your loan
If you get the opportunity to repay the loan in a single amount, do it fast! A tax refund, employment bonus or a monetary birthday present is all the way to get your loan debt paid back and off your back!
If you have to make payments, make them on time and for the amount agreed upon by you and the lender. The disappearance of your loan will only cause gems on your finances and can send you down the creditor bank to collections or worse a trial. Just because the lender does not run your credit to approve your loan does not mean that a third party collector will not report your default to the credit bureaus.