Payday loans are short-term debts that people often take to settle an emergency or urgent problem. The loan comes with a short repayment term, typically no more than 30 days, and the interest can be high.
If you’re unaware of an outstanding payday loan against your name, it becomes tricky to identify who the loans were taken out with. Also, it’s not easy to tell whether the balances were transferred to another company and the amount that needs to be paid. All this information is available out there, so you just need to know how to retrieve it. Checking for this information is the right step if you want to get out of payday loans.
Many people experienced problems with payday loans that were applied for before 2015 when short-term rules were introduced. Some companies exited the market and left a muddied trail of outstanding loans. As a borrower, you can track down this information to understand how many outstanding payday loans you have out there. This is necessary as it helps you to improve your credit score. Get started with these simple steps before you apply for another payday loan.
What Is an Outstanding Payday Loan?
An outstanding payday loan is a loan you have not repaid as agreed. This happens when you default on a payday loan, which can attract different charges. Some lenders will impose penalties for non-repayment of a payday loan as agreed. Because payday loans involve high-interest rates, the cost of the loan can be outrageous when you default and defaulting also hurts your credit score. So, it’s always important to ensure you don’t default on any payday loans you apply for.
How to Track Oustanding Payday Loans?
The most effective payday loan checker is using credit bureaus, as all loans are reported to credit bureaus like TrustUnion, Equifax, and Experian. Once the payday loan lender sells your outstanding loan debt, it’s filed with the credit bureaus, and this information can stay on your credit report for six to ten years. So, it will impact your credit score for a long time if you fail to resolve the outstanding payday loan.
Normally, you should not have issues discovering any existing outstanding payday loans, as collection agents and creditors will contact you night and day, informing you about the outstanding loan. They often use harassing calls in an attempt to recover the money, so simply keep the phone number you used while applying for loans active.
Alternatively, you can contact any payday loan lenders you engaged with before to know if there are outstanding loans you should know about. When sending the message, you will need to provide personal information, which a lender like MaxLoan can use to check in the database if you have an outstanding loan. If you discover any outstanding loans, you should pay off payday loans as soon as possible to avoid piling up penalties.
How to Pay off a Payday Loan Fast
When you discover you have an outstanding payday loan, the best solution is to repay the money quickly. Payday loans are designed for a short-term financial fix, so the loans are supposed to be settled on your next paycheck. These loans come with high interest, hence why you should repay a payday loan as soon as you get your paycheck. By paying early, you can avoid high fees. By delaying repaying the loan, you invite interest accrual, which can hurt you as you would pay an outrageous amount at the end.
Bottom line, the earlier you settle the loan, the better for your credit score and your finances. If you feel a challenge repaying the loan on time, a good option would be consolidating the loan. This means getting another loan to cover the current debt then repaying the second loan over an extended period. Also, you can check if the lender allows you to extend repayment at a small fee, so you can plan to settle the loan within 60 days instead of the typical 30 days.
What Happens If I Cannot Repay a Payday Loan?
One of the options to explore if you cannot repay a payday loan is debt settlement. This means you will stop paying the debt on your bills. Because you cannot pay the debt in full, this could damage your credit rating, which can take seven years to restore your rating.
So, approach this option with caution. The second recommended option is payday loan consolidation. This means you will look for a loan that offers better terms and then apply for the amount you need. You will use this amount to settle the outstanding payday loan. This allows you to avoid high fees that come with defaulting on a loan for a long period. Also, it can be a way to protect your credit score, as you will ensure all loans are repaid without delays.
A payday loan is an ideal solution when you need money quickly to address an urgent problem. However, you should always approach this solution cautiously, as defaulting can attract serious consequences, including damaging your credit score. To check outstanding payday loans:
- Approach the main credit bureaus for your credit report.
- Contact any lenders you borrowed from before to know if you have any outstanding loan payments.
- If you want to apply for a quick loan online, check out MaxLoan for the best rates.