A payday loan is a very short-term loan made to people who need their next paycheck early. It’s intended to tide you over a temporary cash shortfall so that you can pay a bill, buy groceries, fix a car, or do whatever you need to without having to wait another two weeks. They are a useful cash advance service in emergencies , but they have to be repaid within about two weeks, which causes problems for some people.
If you took out a payday loan and since have realized that you are not going to be able to pay it off, the best and only thing you can do is to contact your lender right away. Under no circumstances should you do nothing. Most payday lenders will require you to give them a post-dated check in the amount of the loan plus charges. When the day comes that the loan is due, they will cash the check. If that money is not in your bank account, you are not only liable for over draft charges, but also for prosecution for writing a bad check. The only way you can prove that the check was written in good faith is to call your lender and discuss the problem.
Like any other institution that loans out money, payday lenders have every interest in the world in getting their money back from you. The process of debt collection is expensive, and most would rather negotiate with you than have to collect on you. If you can show them that you really want and mean to repay them as quickly as you are able, then you may get an extension granted on the loan. Some lenders will charge you an extra fee for that, according to what your state laws are. Check into the local lending laws to find out if they do, in fact, require to give you an extension.
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