If you currently have a payday loan or you’re considering one to help out with the bills, you’re not alone. In the US, there are many people who opt for a payday loan in times of desperation.
However, are you aware of the pitfalls of a payday loan? Do you know the pros and cons of choosing a payday lender?
Many people choose a payday loan because they appear to be an easy solution, but that solution quickly becomes another issue altogether.
First off, if you’re using Facebook or other social media be aware that people can use your profile information and use it to look at your financial history or borrowing history.
The reason for this? Social media users will post details about their daily lives online, so a lender can learn a lot about you, just by going through your Facebook. If you buy a new car and post about it, a potential lender may view this as poor spending, just as an example.
Be sure that your social media is set to private, that way, you can keep potential strangers from viewing your profile. It is easy to do and the privacy setting is found under your profile settings.
Second, contact the payday lender and let them know your situation and that you cannot pay. You’ll also want to tell them how much you can afford to pay and when. First, cancel the credit or debit card that you set up for automatic payments, this stops the lender from being able to debit your bank account whenever they want.
Third, confirm that interest charges will stop being charged and, if possible, get that in writing.
Once you have spoken with the lender, you will have an extension agreement applied to your payday loan. This means they cannot go into your bank account and take any more money, unless it is on the date you specified.
If a payday lender doesn’t abide by these rules, you may have to take things to an entirely new level. Stand your ground and tell them you know your rights and the law, also let them know that the payments are not authorized and that you have disallowed further collection via your bank account.
If you’re ever in this situation, a lender should refund your money if that happens.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk