You didn’t intend for it to happen but something occurred financially and you are not able to pay back your payday loan in full and on the due date. It’s not the end of the world but you do need to take a few necessary steps to avoid much bigger problems than the ones that lead you to taking out a payday loan.
The first thing you must do is inform the lender. You want to do this to avoid paying a late payment fee. This occurs when the lender is unable to make an electronic withdrawal from your checking account. Even if there is some money in there, if they are not able to get the full amount, this fee is triggered. If your payday loan was processed in a store and you left them a check, a fee will be charged when the check is returned bounced. Also, your bank may charge you fees in both of these scenarios. These fees can be and should be avoided. All you have to do is inform your lender and explain your circumstances. Most lenders will work with you to find a solution.
After you have informed your lender, you might have the option to roll over or renew your loan for another 2 weeks, or possibly a month. The lender will charge you a fee to do this and possibly additional interest on the loan principle. Make sure you get a complete list of all charges and fees before you agree to this extension.
Another option that may be presented to you is to convert your payday loan into an installment loan. Since you’re having trouble paying back your loan in a short period of time, the lender may assume it will be easier for you to pay back the loan over a longer period of time. With an installment loan, you will make periodic payments over a longer period of time that when the payment schedule is complete, you have successfully paid back your loan and any interest and fees. Typically an installment loan created in this situation will last a few months. No longer will you worry about paying back the full sum in 2 weeks but will only be required to pay back some of it every 2 weeks. Of course, it is likely the lender will charge an extra fee to do this. Ask for a written schedule of all interest and fees before you agree to convert your payday loan into an installment loan.
If you know you will not be able to pay back your payday loan on the date it’s scheduled to be paid back, contact your lender immediately. You have several options available to you to avoid extra charges and give you the ability to pay it back in a way that is easier for you.