Are you thinking about taking out a short term payday loan? You may be unsure whether it’s a secure or practical alternative for you, don’t worry because we will discuss in this article some of the most collated 10 common questions people ask about short term loans to help you make the right decision. Quick cash loans can be a big help to take your next step from an emergency crisis, but if they’re mismanaged, they can land you in even further debt.
What is ‘short term’ loan?
A payday loan, also called as a short term loan is a quick cash with an easy online application for good and bad credit borrowers. This kind of loan is normally scheduled to be repaid within one year. Most people find this instant cash loan to be very convenient due to it’s easy to access online, as well as on the high street. Online payday loans offer a simple and convenient way for you to access short term funds for a limited cover or emergencies. If you have a bad credit score, a payday loan will easily allow you to borrow money unlike with traditional banks that often refuse people with bad credit. Short term loans today are rapidly growing in the consumer finance market.
Can payday loans also affect my credit score?
All financial lending services are the same for having the capability of harming your credit scores if it isn’t properly managed. It’s important that when you apply for a personal loan or any loan, you have to faithfully repay for it because this will improve and restore your credit rating. So don’t miss your payments!
What happens if I can’t pay back my payday loan?
Of course, if you do fail to make your regular payments on time, the lender can take legal action to retrieve what you owe them. A debt collection agency will be involved and the late payments will be visible on your credit report, and the lender may decide to bring you to court and garnish your wages. So before taking out a short term loan, make sure that you aware with this scenario to avoid any default on your loan and for you to obtain credit in the future.
Can I go to jail if don’t pay my payday loan?
Don’t worry because you won’t! But you will be stressed out by debt collectors. If you are on the point of realizing that you can’t pay back your short term loan on time, try contacting a free independent debt charity for help and guidance. After that, talk to your lender again and make realistic arrangements for a repayment plan.
Can I be sued for not paying my payday loan?
Yes, if only it has a court order then a payday lender can arrest your wages. It’s simple, if you don’t repay or default on your loan, the lender can bring legal charges against you. Try to prevent making a default on your loan but if that’s not possible, you can make changes in your budget for the meantime or look for ways on how you can earn additional income.
Is there a possibility that debt collectors contact my family members?
Payday loans are legal for debt collectors to contact other people to locate you but only limited to contacting your family. They are not allowed to collect money for your debt or any personal information about you from your family. The law allows this in case a debt collector tries to contact you and it has been unsuccessful for them.
How can I stop payday loans from calling me?
You will find yourself getting phone calls from a third party debt collection agency if you haven’t paid your payday loan. It’s normal that they call you and remind you but the best thing you can do is not to avoid them and try to resolve the problem by seeking advice from an independent debt charity and work with the debt collector for a solution that the both of you agrees on. Be wary of scammers and make sure you only give your personal details to a verified caller.
Can I use short term loans to pay for student loans?
Most lenders won’t let you pay off student loans using a personal loan and moreover, it’s improbable that you’ll be able to borrow short term loan to cover your student fees, although there are some payday loans who will but it’s very rare. You can opt for a long term personal loan to help you unify your student loans into one monthly payment with a fixed interest rate, take note that you won’t be eligible to deduct student loan interest if you pay off your debts this way.
Can you repay your payday loan early?
It will always depend on your lender, some do allow you to repay your loan early while some prefer to stick to the appointed time schedule or charge and an early payoff fee. So ask your lender about this.
Is a payday loan a good idea for my business?
A short term loan can be a helpful way to boost your small business but this will only happen if you’re a responsible borrower to make your repayments on time. This kind of loan is becoming a popular form of credit for both individuals and businesses for having the benefit of less requirements– no tax returns, business plans or other documentation required. This is quick helpful way to ease the initial pressure of startup costs.
