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Late Payments and Payday Loans
If the world worked in such a way that we never had to repay loans, then almost everyone would be happy. The very nature of loans, however, is that they must be repaid at some point. For payday loans, there are certain laws and regulations that govern how and when you must repay them. In general, you have about two weeks to pay back the entire amount of the loan in addition to the fees that your lender will tack on. But, what happens when you canít pay the loan back in the allotted time? You really have three options:
Paying the loan off late at the agreed-upon amount
Getting a loan extension
Defaulting on the loan
If you have a hunch that you wonít be able to pay the loan back on time, then you should probably get in contact with your lender. They will be much likelier to grant you some leeway if you reach out to them ahead of time. If you donít contact them, then they might think that youíre skipping out on the loan altogether. In this case, it will be within their legal right to try and collect on your debts to the fullest extent of the law. If you can pay back the loan but are going to be a day or two short, they might not levy any additional fees against you or they will provide you with a loan extension.
In the event of a loan extension, you will be required to pay a rollover amount. Letís say that you took out a $100 payday loan. For the initial loan term, the lender will charge you something like $15. Your total payback fee would then be $115. But, if you need a loan extension, you would be given another two weeks to pay back the loan and another $15 would be tacked on to your bill.
If you completely default on the loan, then it is possible that the lenders could use legal action to get the agreed-upon amount back in their possession. Most payday loans do not end this way because of their short-term and often low-cost nature. Lenders must follow all federal and state guidelines for seeking collection. If they donít, they could be subject to litigation in their own right. In any event, if you get a payday loan, itís not likely that you wonít be able to pay it back within the two-week time period. Still, itís always good to know your options in case something like that does happen.