Payday loans are typically small, but borrowers that fail to pay on time may end up coughing up more in interest and penalties than the cost of repayment. When you delay your payment, interest charges can add up quickly. Service charges are often attached to both the initial principle and any consequent default. Check out these simple steps to avoid defaulting on your loan:
Stay Protected
Sign up for overdraft protection on your checking account. If approved, you may be able to link your account to extra funds or a line of credit. These reserves will cover you if you miss a loan payment.
Provide a Bank Account Number
Provide your lender with a bank account number, whether or not it’s required in the application. It’s a good idea to have an easily accessible source of funds available if you’re unable to pay off the loan. And they’ll be more likely to give you a break if you can fork over a portion of the payment.
Have a Plan B
Have a backup plan in case of an emergency. If you don’t have any other options, you may be able to turn to friends and family for a short-term loan. Avoid taking out another loan to pay the first. Seek a credit counselor for additional options.
Pay Early
Pay back your loan early if you can. Most payday loan lenders will be more than happy to accept an early payment. Often times, people will hold off on their payments, only to be faced with financially debilitating situations right before the due date. Play it safe and pay off the loan whenever you have the money.
Fight Back
Look over your agreement and discuss any penalties or fees with the lender. They may be able to scrap the penalties. Report any unlawful or unprofessional dealings to the Better Business Bureau. If you have been charged for violations outside of your contract, seek legal counsel to resolve the issue.
