It is very important that you pay back your loan on time, and there are some tips that can help. This article will give you all the information you need when it comes to clearing your debt in a timely manner. When you pay off the money you owe by the due date, you can improve your credit quite a bit. The last thing you want is to default on any sort of loan because of the severe consequences that come with doing so.
How Long do I have to Pay Back a Payday Loan?
The precise amount of time that you will have to pay back a payday loan depends on a couple of things, including the lender and amount you borrow. A lot of private lenders limit their loan terms to 2-4 weeks, though some offer longer payback periods. If you borrow a few hundred pounds, you’ll most likely have to pay it off with your next paycheque (about 2 weeks). Those who borrow upwards of £1,000 might get a longer term. Just keep in mind that a longer loan term also means having to pay more interest.
Repaying Your Loan Early
It’s always a good idea to pay back your loan early if at all possible. This can help you save quite a bit of money with regards to interest. This shouldn’t be a problem, as most lenders don’t charge a fee for early repayment. Make sure that you find a lender that doesn’t charge for this so you can pay back the money sooner if you are able. This is definitely something you will need to find out when looking for the best lender to borrow from.
Automatic Repayment
The contract that you sign with the lender will most likely state that the full amount of the loan will be automatically taken from your bank account on the due date. This is fairly standard practice with payday loans. It is ultimately a good thing, as it will prevent any issues with forgetting to make the payment. If this is something you are truly uncomfortable with, you might be able to negotiate with the lender. They could be amenable to letting you make the payment when the loan is due, depending on how flexible they are.
Missed Payments
If you are paying back your payday loan in a serious of instalments, it is crucial that you not miss any payments. Each missed payment will count against your credit, so you have to be prompt every single time. A majority of private lenders do charge a fee for missed payments, so you will need to consider that as well. Make sure you know how much the fee will be before signing a contract with a certain lender. If you do have to miss any payments, you don’t want to pay more than necessary.
Difficulty Paying the Loan Back
If you won’t be able to pay back the loan due to unforeseen circumstances, you need to work with the lender to come up with a solution. It might be tempting to simply ignore them, but this will only worsen your situation. You need to get in touch with your lender as soon as possible. They will more than likely be able to help you out in some way. This could mean waiving certain fees or even giving you a “holiday” from your loan, allowing you to catch up. Some of these lenders are more flexible than others, but you should let yours know regardless. They will appreciate you keeping them in the loop.
Consequences of Not Paying Back Your Loan
If you think that you can simply not pay back your loan without any consequences, you are dreaming. Those who simply do not pay back the money they borrow will face serious consequences. For starters, your credit will take a major hit. You can count on your score decreasing significantly once your debt goes to a collections agency. The lender can opt to file a lawsuit to get the money from you as well. Until you pay back the full amount, you will be repeatedly contacted by a collections agency.
Getting a payday loan can be a great idea when you are in desperate need of fast cash, but you have to pay it back on time. It is important that you prioritize your loan so that you can clear your debt as quickly as possible. Try to pay back the loan early by cutting back on expenses. This will help you save some money and reduce your chances of defaulting. If you think you will not be able to pay back the full amount on time, you need to get in touch with your lender right away. By doing this you will minimize the potential fallout of this sort of situation.