Since payday loans became available to anyone with a debit card, a mobile phone and a bank account many companies offering these loans have given their customers the ability to roll over a loan several times if those customers have been unable to pay the full amount owed on the prearranged day.
Rolling over a payday loan will see the customer simply paying only the amount of interest owed for the term of the loan and then an extension on the loan will be given to that person, and at the end of the new loan term another rollover could be offered.
However, due to the nature of payday loans being only a short term loan, MP’s and debt advisory services have been upset about the way rolling over a loan has affected thousands of people and has often trapped those people into spiralling debts.
By continually rolling over a loan a person taking out such a loan is often going to end up paying back huge amounts of cash, if they keep on rolling over the loan much more than the amount originally borrowed and this is something which is deemed unpalatable by those MP’s and debt advisors.
So proposals have been put in place whereby all payday lenders are to voluntarily put in place a system whereby customers taking out a payday loan are only going to be given the option of rolling over a payday loan once, and this it is hoped is going to stop people from ending up deep in debt and never being able to repay the original amount owed.
Should you be in a position whereby you have taken out a payday loan and on the day you are due to repay the loan you cannot afford to do so then it may be worth your while considering to rollover the loan for another month, as mentioned by taking this option you are only going to have to repay the original amount of interest and then will be given usually a month to repay the original amount owed and another months worth of interest.
Should you then find that you are unable to repay the original loan amount and the interest owed by rolling over that loan on the day arranged, then you need to contact the payday loan company who borrowed you the money and ask them to put in place a repayment plan to allow you to gradually pay off the loan over a pre-determined amount of time.
By putting into place a repayment plan most lenders are then going to freeze any additional interest payments and this will allow you to pay a set amount off each week or month until the balance of your account has been paid off.
Always contact any payday lender in advance and alert them to the fact you are not going to be able to repay the loan on time, if this is the situation you find yourself in, and they will then talk you through a repayment plan option.