How Quickly Do I Have to Repay My Loan?

One of the features of payday loans that borrowers love best is their repayment flexibility. Whereas traditional loans have hard and fast due dates, payday loans give borrowers a little more breathing room. If you cannot repay a traditional loan in full on its original due date, you will likely face collections agencies, damage to your credit, and repossession of any property attached to the loan. With payday loans, however, most lenders give you the option of extending the loan’s due date for extra repayment time. Read on for a more in-depth explanation of how long you have to repay your payday loan.

The Original Due Date

The original due date of a payday loan is typically set for your next payday, although this varies from lender to lender. Payday lenders may also choose due dates based upon a set amount of time, such as two weeks from when the loan was originated. On this due date, the amount of the payday loan as well as the lender’s finance charge will be electronically withdrawn from your account unless you make alternate arrangements with your lender.

Repayment Options

Most payday lenders offer a variety of repayment options to their borrowers. If you cannot pay in full on the original due date, you should let your lender know in advance so other arrangements can be made. Every payday lender has different repayment policies, but the majority of lenders tend to offer the following three repayment options:

1. Repay the loan in full on the original due date. With this option, the full amount of the loan and the finance charge are repaid to the lender on the date indicated in your original loan agreement.
2. Pay the full finance charge and a portion of the loan on the original due date. In this case, you can only afford to pay the finance charge and a portion of the payday loan on its original due date. In other words, you need more time to repay your lender. If this happens, your lender will most likely require you to pay at least the finance charge on the original due date and will then extend the loan for another repayment period. This will cost you an additional finance charge.
3. Pay just the finance charge on the original due date. With this option, you only pay the interest or finance charge of the loan on the due date and then extend the repayment period. When the additional repayment term expires, you will have to pay an additional finance charge as well as the original principal of the loan.