Applying for a payday loan and getting approved can be very exciting when you are experiencing a major need for fast cash. However, the due date will come before you know it, and you will need to be prepared to repay the debt. Payday loan lenders will most likely agree to extend your loan due date, but you should realize what this will mean. Using payday loans to help you get by is a good option, as long as you are fully prepared to repay the loan when it is due.
How Long Will You Have To Repay The Loan?
Most payday loans are due within 14 days from the date they are issued, but this varies. These loans are referred to as payday loans because they are designed to get you by until you receive your next paycheck. While some people get paid weekly, many people get paid every two weeks, which is why you might have around 14 days to repay your money.
When you take the loan, this might seem like a perfect idea. You could simply use your next paycheck to repay the payday loan, but will you be able to survive another two weeks without any money? This is where some people encounter problems repaying their payday loans, but you could avoid this problem if you can live without a lot of money for the next two weeks after you repay the loan.
The main thing to consider when taking a payday loan is whether or not you feel you would be able to repay it on time. If you cannot, you will encounter additional fees.
What Fees Will You Incur If You Extend The Loan?
Most payday lenders are willing to extend loans, but they do not do this for free. If you encounter a problem and cannot repay the loan, the best thing to do is contact the lender as soon as possible. This is especially important if you set up the payment directly through your bank account. If you had set it up this way, the lender will automatically debit your checking account for the total amount owed on the due date. If the money is not in your account, the lender could charge you a fee, plus your bank may charge you a fee.
If you contact the lender ahead of time, you could avoid these fees; however, you will still have some fees to pay. Approximately 80% of all payday loans taken are rolled over. If you cannot pay the loan, you will have to roll it over. When you do this, you will pay another fee. The cost of taking or rolling over a payday loan is usually between 10% to 30% of the loan amount.
This means if you take a $500 payday loan, you will initially pay $50 to $150 in fees, which means you will only receive $350 to $450 from the original loan. If you rollover this loan, you may have to pay the same fees again.
If you cannot repay the full loan, you might be better off trying to repay at least part of it. This would reduce the fees you would have to pay to rollover the loan when it is due. If you want to avoid additional fees, you might want to consider borrowing money from a friend to repay the loan in full by its due date.
Taking a payday loan is a great way to get by during a financial crisis, but it is also important to understand the costs associated with the loan. To learn more, contact a payday lender to learn more about the process, fees, and terms.
Share28 December 2015
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