When Does A Payday Loan Typically Mature and How Long Should It Last?
Payday loans are fondly referred to as short-term loans. In fact, a payday loan is typically designed to save you in emergencies. For instance, you are in a precarious situation that requires urgent attention. But, there is no money in your bank account and you are dependent on monthly payments. What do you do?
Uncertain, right? Well, a payday loan to the rescue! Like every other typical personal loan, you have to understand all the risks and costs involved.
How Long Is A Payday Loan Supposed To Last?
A majority of payday loans are often followed by another loan within the space of two to four weeks. To get this benefit, you must pay one-third of an existing loan.
Payday loans are unsecured loans. So, we understand you are curious to get your facts right. However, when compared with other personal loans, payday loans mature quickly.
How Often Are Payday Loans Rolled Over?
The decision to roll over payday loans is exclusive to the payday lender. This can happen as many times as possible. But, this is to be paid in a single payment and on the due date.
If this happens when the original loan and interest are due, the consumer pays only the interest. Then, after the next payday, which is in a month, the payday loan borrowers are expected to honor the payday loan agreement and repay the loan with the interest rates.
What Is The Cycle Of Payday Loans?
The payday loan features are not the same as other loan types. A typical payday loan customer can give payday lenders a post-dated check and permit them to electronically withdraw money inclusive of the interest and fees.
Sometimes, the lender does not even verify the borrower’s income or conduct a credit check. The lender holds the check for two weeks or until the next payday. However, if you do not have sufficient money to cover the payday loan cost, the payday loan cycle begins. This leaves you with three choices such as:
- Pay for a service charge
- Take a new loan to pay an existing one
- Write a new check
Unlike every other payday lender, we look into your financial obligations to avoid putting you in a debt trap situation.
What Is The Longest Term A Payday Loan Can Be?
The longest term for a payday loan depends on the payday loan size. CFPB maintains that a payday loan that is 4 to 6 months is a reasonably long period for a loan of about $500.
Well, different strokes for different folks. What applies to one lender may not be for another. To this effect, some lenders offer loan terms for just a couple of weeks. This is why you need to understand the type of lender you hope to favor.There are too many conflicts surrounding the maturity of the payday loan. You are probably having a hard time getting a hang of it. Not to worry, AdvanceSOS knows the right way to go about it.