Generally, rolling over or renewing a payday loan implies skipping the scheduled payments. It implies you pay the dues days after the actual date. It attracts fees and other loan charges. Thus, you ultimately pay a higher sum than you intended previously.
For example, if you borrow £300, you may owe £345 in 14 days plus £45 fees. If you miss another payment, you pay £45 additional on the loan. It implies the cost of the loan goes up from £45 to £90. If you roll over the payment again, you may attract £45 extra. Missing several payments in a row leads to a payday loan debt trap.
Some lenders grant the opportunity to renew or rollover payday loans. However, many deny it as it impacts the borrower’s financial well-being. It is the reason some lenders have a cap up to which you can roll over a payday loan payment.
What Would you need to renew a Payday loan?
When you take out a payday loan, the total amount you repay is based on a few parameters:
- The interest rate
- The amount of time you take to repay it
- Frequency of payments
- Credit score
These factors determine the total amount you need to pay each month. If you renew your loan, you may get better rates on some factors.
If you renew your loan, you might be able to achieve the following results:
- Lower your cost of borrowing
- Reduce your loan payments
- Consolidate debt
For example, at the dawn of the loan expiry, you might be able to switch from a secured to an unsecured loan. However, a payday loan is an unsecured loan about which you should not worry.
What should you check while renewing a fast loan?
The most important thing to consider while renewing a loan is to analyse the payment’s affordability. Analyse whether you can pay the amount without any issues or not. Here are other aspects that you should be aware of before topping up your loan:
- The lenders may charge non-repayment fees or late fees
- They may report the missed payment to credit bureaus leading to CCJ and court proceedings
- The lender may call and ask you to pay the dues by a particular date.
- They may sue it for non-repayment or default
Another thing that you should check is- whether the lender provides you the best rate or not. Analyse and explore different quotes from other lenders as well. It will help you choose the right.
Can I ask for more money while topping up a payday loan?
The answer is- YES; you can exceed the payday loan borrowing limit. It does not imply that you should do so. Be mindful of the fact that you may again fall into debt series. Borrow what you necessarily need.
However, before that, you would need to pay off some payday loans or clear dues. It is important as the lender would not trust you again. You can either consolidate the payday loan payments or pay it all with one lump sum to gain trust. You and the lender want to reduce the risk attached, and thus, paying off some dues may help.
It becomes easier to qualify then. If you have a regular income, you can get a payday loan with no credit check from a direct lender in the UK premises. It does not mandate deep credit checks; it would not hamper your credit score much. Instead, your credit may improve by clearing the debt backlog.
Are there any alternatives to Payday loan rollovers?
Payday loans are high-interest loans. One should analyse the purpose and the amount required before committing to it. Finances may not remain static every time.
Thus, always borrow a flexible amount you can pay comfortably even with compromised finances. While you can roll over a payday loan, you should avoid it. Here are some actionable strategies to check if you miss a payday loan payment:
1) Speak about it to your lender
If you miss a payment and are unsure of the next, discuss it with the lender. Familiarising the lender with your financial situation may prove beneficial. He may help you by providing an alternative repayment schedule that aligns with your existing finances.
Some lenders provide a payment holiday or reduce interest rates for applicants with disturbed finances. However, it is a rare situation.
2) Hire an expert
It is one of the best ways to re-track finances. If you have someone known or want to sort your finances better, a financial advisor may help. He shares the required expertise in debt management and boosting finances. You may benefit from these aspects if you are least aware of payday loan repayments and the best ways to manage a loan.
Sometimes, direct lenders provide the best guidance on managing payday loan payments. By contacting Myfinancialloans, you can get the desired advice and dominate finances. We not only provide personalised payday loans but assist you in every step in case your finances fall.
You just need to reach out to us as soon as you face repayment issues. We help figure out the best solution as per your existing finances. We make sure that the solution does not harm your budget.
3) Cancel the Continuous payment authority
It is the first thing you should do if you incur financial issues. CPA may impact your finances further. For CPAs to work efficiently, you should ensure a minimal balance in the account. If it hampers your other liabilities and important purchases, cancel the continuous payment authority (CPA). It would help avoid unnecessary payments that may impact your budget.
4) Consolidate debts
If you have beyond 10 pending payday loan payments, consolidation may help. Paying them one by one may prove stressful. Identify your circumstances to consolidate payments and debts. It would help you avoid the debt cycle and improve your credit score. It reduces your liabilities and helps re-track your finances better.
If you are stressed about making loan repayments timely, these tips can help. Payday loan debt rollovers can be difficult to deal with. Hence, take the right action at the apt time. Identify how rollover may impact lifestyle expenses. Seek ways to increase income and consolidate debt to clear pending debts.