Payday Loans

Repayment Of Payday Loan Debt – Some Crucial Don’ts

There are plenty of things that you must take into account when it comes to repayment of payday loan debt.

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Lack of planning and foresight is one of the main reasons why many people are pushed into the viscous cycle of payday debt. Following is a brief rundown on some of the things that you must not do in order to avoid getting into serious debt troubles.

Don’t Be Late On Your Payments

The interest rates on payday loans can be unusually very high. The APR (annual percentage rate) that lenders charge on these loans is usually in three digits; it can be anywhere between 150% and 700% per annum. So, the interest for even a single day can be substantial. If you are late on repayment by a week, you may have to pay hefty penalties (including additional interest for seven more days), which can make the repayment further more difficult to you. Therefore, you must plan everything in advance in order to avoid the possibility of late payment.

Don’t Just Make The Minimum Monthly Payment And Avoid The Actual Debt

Just like credit cards, many payday loan companies these days offer a “minimum payment” option for the repayment of payday loan debt. As per this provision, the borrower is asked to pay a comparatively very small amount of money on the due date and get the repayment period extended for one more month. The same process can be repeated the next month also. But, as any wise man can figure it out that using this option only means that you are avoiding actual debt, which is in reality growing enormously because you have to pay interest for the extended period of time. Considering the sky-high rates payday lenders charge, your outstanding loan balances can become double or even triple within just a couple of months. Therefore, you are strongly recommended not to use this option. Always remember, the best way to solve a problem is to face it, not to avoid it because avoiding it will not solve it; it will only make the problem worse.

Do Not Allow Your Checks To Bounce

When it comes to the repayment of payday loan debt, you must avoid the possibilities of check bouncing at all costs. As part of the process, when you apply for a payday loan, you are asked to submit a post-dated check (principal amount plus interest and other charges) to the lender. On the set due date, the lender sends the check for collection to your bank (where you have your checking account). If the check is bounced because of non-sufficient fund in the account, you will be charged a hefty penalty both by your lender as well as by your bank. Worse, many lenders keep sending the same check for collections again and again, which means you may be charged a high amount of penalty for multiple times. Therefore, before you borrow cash advance, make sure that you will certainly have sufficient fund in your bank account by the set due date and that your check will not bounce.

Overall, if you follow the above don’ts regarding repayment of payday loan debt, you can easily avoid the possibilities of getting trapped into a viscous cycle of payday debt. When it comes to dealing with payday lending, you have to be very careful in your approach.

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Posted in Payday Loans, Repayment Strategies | 1 Comment »

One Response to “Repayment Of Payday Loan Debt – Some Crucial Don’ts”

  1. Martin says:

    Pay day loan are very easy to avail but it becomes not as easy to repay these loans. Once you take pay day loan and miss even a single payment, the amount becomes too big to pay due to very high rate of interest so the most important thing regarding pay day loan must be your punctuality of doing the payment, if you are not given your installments in time, the problem will become too big to handle. One more thing which is very popular is just do the minimum payments and your due date will be extended for more time but the loss is only yours. You have to pay interest for the extra time and your loan amount will also be just like the same as it was. So just make it a habit of making the payments in full, do not make the part payments because ultimately it will make the problem bad to worse. Bounced checks give a very bad impression of your financial position to your creditors. You should always remember that you have the sufficient amount of money in your account so that your checks will never be bounced. These steps are very important to keep in mind if you are going to take a pay day loan or already have one such loan,

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