Having Trouble Paying a Payday Loan?

When you take out a payday loan, you typically have to repay the full amount plus interest and fees within a few weeks. Often, payday lenders require either a post-dated check or a direct debit authorization, ensuring that they can process your payment when the amount is due.

But, if you can’t repay the payday loan on time, the consequences can be severe. You’ll usually accrue additional fees and interest, will be hounded by collection calls, and, depending on your state, may even have your wages garnished.

If you know you are going to have trouble repaying your payday loan, you do have options. Here are a few solutions that may work for you.

Ask for an Extension
In cases where you no you won’t be able to fully repay your payday loan in advance of the due date, you may be able to request an extension. This could get you a few extra weeks to pay the debt, but you will face additional interest charges and fees, increasing the amount you owe.

If you can afford to put anything toward the debt, see if you can pay it down and extend the rest. This could reduce the amount of interest you’ll need to pay, helping you save money in comparison to not making any payment at all.

However, this approach should only be used if you are reasonably certain that you can pay off the payday loan on the next due date. Otherwise, you are just compiling on the problem, and the additional fees and interest may become completely unmanageable.

Shop Around for a Personal Loan
Even if you have poor credit, that doesn’t mean you may not be able to secure a personal loan. Often, you’ll find options with lower interest rates that payday lenders offer, even when the loans are designed for people with bad credit.

Additionally, since most payday loans are $500 or less, you aren’t trying to borrow a substantial sum, increasing your odds of approval. You can also see if a friend or family member will act as a cosigner. If they have good credit, then it may be easier to get a reasonable interest rate on a loan. Contact local banks and credit unions or shop around online to find a reputable lender who may be able to approve you.

It’s important only to use this approach if you are sure you can make the monthly payments. Most personal loans work on set installments, so you’ll be able to see your payment in advance. But, if you can’t afford that payment, you are using a new problem to solve the old one. That means you could end up in more trouble down the road, making this a less than ideal solution.

Learn about different low interest loan options for potential consolidation.

Reach Out to a Credit Counseling Agency
Reputable credit counseling agencies may be able to help you manage your debts more effectively, including by functioning as your advocate with lenders, helping you secure lower interest rates, and consolidating your debt payments. Additionally, they may be able to assist with negotiating a settlement, allowing you to meet your obligation for a smaller dollar amount.

There can be conditions if you enter into a debt management program, but they are often worth it if you are in dire straights. In most cases, you can consult with a credit counselor at no cost to explore your options, allowing you to see if this is the right choice for you.

No matter which approach you take, always remember that there are rules governing how payday lenders can act. While they vary somewhat by state, they can never threaten you with jail time or criminal charges like fraud.

If you aren’t sure if your payday lender is acting legally, research your local laws and regulations. If they are in violation, you can file a complaint and may be entitled to other protections.