Payday loans are short-term loans that allow you to borrow small amounts of money. These loans are available at high-street shops and online and are an alternative to quickquid. Although payday loans are easy to obtain, the interest rates can be very high. You may have other options to solve your short-term cash problems than borrowing from payday lenders.
Before you apply for a payday loan, compare interest rates and fees. You should be clear about what happens if you don’t repay it.
This page will tell you what to do with your payday lender before they offer you a loan. It also explains how you repay the loan.
You Should Always Do Your Research Before You Apply For A Payday Loan
Compare prices to find the best deal. Online payday lenders should publish their deals at least once on a price comparison site so that you can compare them with other offers.
When checking, make sure to use the company name and not the website name. It’ll almost always be found on the homepage.
Before granting you a loan, the lender will verify that you can repay it. The lender should verify that you have enough income each month to repay the loan.
The loan terms should be explained by the lender. This includes how much you have to repay, what happens if the loan isn’t paid back on time and whether the loan is suitable for long-term borrowing.
Advertisements for payday loans must include the warning that late repayment could cause serious financial problems.
Repaying A Payday Loan
You will usually be allowed up to one month to repay the money borrowed plus interest.
Your bank debit card is the most popular way to repay a payday loan. You agree to allow the lender to take money from your bank account when you apply for a loan. This is known as a continuous payments authority (CPA).
Lenders may continue to ask your bank for money if you don’t have enough funds in your account to pay the loan back on the due date. Late payment will incur additional charges.
Your lender should not use the CPA more often than once if they haven’t been able to access your account’s funds. They shouldn’t also try to make a partial payment.
Stopping The Payment
You can ask your bank or credit card provider to stop taking the loan payment if you are unable to pay it back. This must be done at least one day before the due date.
Payday Loan Extension
Lenders may extend your payment terms if you have difficulty paying the loan. You may be offered more time to repay the loan or the option of rolling over the loan. The rollover is a new agreement that covers the repayment of the original loan. Do not extend your loan, or agree to it being rolled over. You will have to repay more money as the lender will charge you extra interest, additional fees, or other charges.
The lender should not roll over your loan twice. A lender should not roll over your loan more than once. They will also need to provide you with an information sheet that tells you where you can find free debt advice.