What to Do If We Cannot Pay a Payday Loan on Due Date?

What to Do If We Cannot Pay a Payday Loan on Due Date?

If you ever find yourself in a tough financial situation and in need of an urgent cash advance, a payday loan can be the quick-fix solution that you need. These are essentially short-term loans for small amounts that vary $50 to $1,000 and are usually due in full as soon as your next paycheck arrives.

Borrowers can access these loans by visiting a payday lending office or applying for payday loans with no credit check on iPaydayLoans. In terms of eligibility, these loans are easily accessible, as you don’t need to have a good credit score to get approved. 

All you need is to be at least 18 years of age and show proof of a steady income stream, be it from employment or a business. If approved, you can expect the cash to be deposited in your account as soon as the next business day.

What to Do If We Cannot Pay a Payday Loan on Due Date?

What Happens if You Fail To Repay a Payday Loan?

If you borrow a payday loan and fail to repay it back on time, there are a number of consequences to consider, so we’ve listed some of the main scenarios that you can expect. These include:

Extra late fees: Most payday lenders will often charge you late payment fees if you fail to repay your loan in full and on time. These fees can often be exorbitantly high and can often raise the total cost of the loan dramatically.

Debt collection: In most cases, the lender will try to recover the money owed for about 60 days. However, if you fail to repay them within this time frame, they will most likely hand the debt over to a debt collection agency and even if the amount owed is small, they may still end up taking you to court.

Credit score: While most payday lenders do not typically report payments to the relevant credit bureaus if you default on your loan and a collection agency gets to handle the debt, then it is very likely that your credit score will also drop.

You can also find out more about how these loans are typically handled by visiting the page of Nicky Austin on the iPaydayLoans website.

Can a Payday Loan Debt be Written Off? 

It is not very common for such a debt to be forgiven because most payday lenders stand to make a huge profit from the high-interest rates that they charge on these loans. As a result, they will often attempt to recoup their money as many times as possible and in the worst-case scenario, they will simply send the account to a collection agency.

These third-party companies tend to use more aggressive methods to recover any money that is owed like taking you to court. And if this happens, it will not only increase the total cost of your loan significantly but will also seriously damage your credit score, which will make it even harder for you to secure another loan in the near future.

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The good news is that some payday lenders will usually offer a rollover, which essentially means letting the borrower pay a fee to push back the initial loan balance to a future date. However, the downside of this is that while the fees can still be expensive and if the rollover continues, it can end up creating a cycle of bad debt that is often difficult to get out of.

Do Payday Loans Impact My Credit Rating?

Payday lenders do not usually run hard credit checks, which means that if you were to apply for one, it will not appear on your credit report or affect your credit score. And even if you make on-time payments, most payday lenders will not report them to the relevant credit bureaus, so they will not help you to rebuild your credit score.

That being said, if the loan becomes delinquent, it can appear on your credit report, especially if the payday lender hands off the debt to a collection agency. Once they purchase it, the agency will likely report the overdue amount to the credit bureaus, which will lower your credit rating.

What to Do If We Cannot Pay a Payday Loan on Due Date?

Where Can I Obtain A Payday Loan?

If you are confident that you can afford to borrow a payday loan, you can get one online via iPaydayLoans. The online credit broker provides borrowers with a quick way to locate legitimate payday lenders and compare multiple loan offers. All you need to get started is to follow the steps below:

Step 1: Head over to the website and fill out the online pre-approval form. This will require you to fill in some basic personal and financial details such as your name, address, bank account number, credit score, etc.

Step 2: Once the form is submitted, you won’t need to wait long to receive a decision on your loan request. If approved, you will be presented with multiple payday loan offers to choose from, each one having its own rates and terms to consider.

Step 3: If you find the loan offer that best suits your budget and needs, you only need to e-sign the loan agreement and you can expect your funds to be deposited in your account as soon as the next business day.

What Payday Loan Alternatives Can I Get?

If you are in a tough financial spot but can’t afford to get a payday loan or simply don’t want to, there are still some other alternatives worth considering.

#1. Credit Card

If you have an active credit card, you can always opt to request a cash advance and the process is fast and simple, as all you need is to use an ATM to withdraw the money. However, this option can be extremely costly as cash advance APRs are very high and often start to accrue from the moment you make the withdrawal.

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Alternatively, you can apply for a 0% Intro APR card that allows you to make payments without accruing interest for a limited period of time. However, do keep in mind that you will have to pay interest on whatever remaining balance is left once that period lapses.

#2. Bad Credit Loan

If you need a lump sum of money but have a bad credit score that prevents you from securing approval from a bank or credit union, you always have the option of having a bad credit loan via iPaydayLoans. The benefit of these types of loans is that they allow you to access funding even if your credit rating is less than stellar and they have lower APRs than payday loans. Plus, they come with fixed monthly payments, so they are typically more predictable and easier to budget for.

Conclusion

There is no question that a payday loan can help you deal with an urgent or unexpected expense if you lack a sufficient balance in your account to deal with it yourself. However, they should only ever be borrowed if you are confident that you can repay it in full when the loan comes due. Otherwise, you risk jeopardizing your credit score and being charged an exorbitant amount of fees that could leave you stuck in a vicious cycle of debt.

To avoid this, you can always reach out to the payday lender in advance to see if they are open to letting you pay whatever balance remains through an installment plan. You simply need to explain your situation and why you are unable to repay it all at once. In most cases, they shouldn’t have a problem with it as long as you can guarantee that they will receive their payments on time.