Can I Save Money by Paying off a Payday Loan Faster?

Can I Save Money by Paying off a Payday Loan Faster?

  • Often no credit checks: Even those with bad credit can get same-day payday loans with some lenders.

You pay a set fee to borrow a payday loan. Even if you pay off the loan before it matures, you’ll still have to pay the fee in full.

However, if you change your mind and decide you no longer need the loan, some lenders offer a one- to three-day satisfaction guarantees where you can cancel the loan and return just the principal. You’ll most likely need to call or email the company’s customer service or mail a post-e. Once the company receives your notice, they’ll withdraw only the principal from your account.

No matter how you contact your payday loan lender, be sure to document proof of all your communications. This helps if you run into problems and need to file a complaint through the Consumer Finance Protection Bureau.

What If I Can’t Pay My Same-Day Payday Loan by Its Due Date?

Because there isn’t much time to repay a payday loan, only one out of five people can pay it back when it’s due. Payday loan contracts are legally binding, so it’s crucial to understand nonpayment actions your lender can pursue. Bank withdrawals, reports to credit bureaus, and collection calls are possibilities, but it’s illegal to threaten you with jail time. Lenders who do should immediately be reported to your state attorney general’s office.

Certain states allow you to roll over your same-day payday loan for another 14 days by paying the interest, although the number of times this is allowed also varies by state. See your state’s payday loan laws for an idea of what’s available in your area.

  • Taking advantage of extended payment plans (EPP). Lenders who are members of the Community Financial Services Association of America (CFSA) must offer no-cost EPPs to customers where state regulations permit.
  • Paying off the payday loan with a credit card. Balance transfer cards often have 0% interest during the promotional period. (more…)

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