Do not take out a payday loan until you are sure you can repay it in full and on time. Otherwise, you could find yourself in financial trouble.
How Payday Loans Work?
Payday loans were initially designed to provide short-term financial assistance until payday.
You repay the entire amount at the end of each month with interest and other charges.
You can borrow more money – usually for three months, but longer loans are also available – and you can repay it in installments. Do you need 50 quid quickly? LoanPig is here to help you.
These loans are often short-term and high-cost, but they all have one thing in common.
A payday loan can be costly and make your financial situation more difficult if you are unable to repay it on time. Be careful before you choose one.
What Do Payday Loans Cost You?
Did You Know That?
An average annual percentage rate of interest (APR), could reach 1,500% in a year. This compares to 22.8% for a credit card.
For a period of 30 days, a borrower will only pay £24 in fees for each £100 borrowed. The maximum amount of default fees you can get is £15 plus interest for not repaying your loan on time.
An overall cap will ensure that you never repay more than the original amount borrowed.
Direct Debit
Direct Debits may be cancelled by contacting the bank or building society or via your online banking app.
It is best to tell the supplier if you do not want the goods or services. This will ensure that your order is cancelled without any further payments.
To arrange alternative payment, contact the supplier as soon as possible.
Standing Order
By contacting your bank/building society, you can cancel a standing order, and change the date, amount, or frequency.
Recurring Payment
By contacting your bank/card provider and stating that you have withdrawn consent for the recurring monthly payment, you can cancel it.
Any payments received by the organization must be refunded along with any charges. However, you must notify them by the end of each working day that the payment is due.
The fact that you owe the lender a debt does not change the fact that the recurring payment can be cancelled.
If you are having difficulty paying back the money, inform the lender immediately and ask them if they can grant you time to repay.
Avoid Falling For The Payday Loan Trap
A payday lender may offer an extension, known as a deferral of a rollover if you have difficulty repaying a payday loan.
Your lender may only offer two rollovers. You must be provided with an information sheet by your lender each time you are offered one. This will include details about debt advice providers and free services.
A payday loan rollover might sound like a great option if you have trouble repaying your existing loan. It can lead to serious problems, as you will be responsible for much more interest and other fees over the life of the loan.
