Almost everyone needs a little financial boost every now and then to get them over rough patches. For fast loan approval and cash out the door, it’s hard to beat a payday loan. The terms and conditions can be a bit restrictive, but the convenience is without question.
After receiving a payday loan, the borrower’s concern shifts to repaying the loan when it is due. There are actually two ways to apply for said loan. One is by going through an online website and the other is walking into a brick-and-mortar payday store. If the loan is secured online, the payday loan company will require banking information in order to initiate an ACH transaction for repayment of the loan on its due-date (payday).
The process is a little different in a store location. In most cases, not all, the payday loan store will require the borrower to issue a post-dated check for the amount of the loan plus interest. The date listed on the check will typically be the borrower’s next payday, perhaps the day after. When the due date arrives, the borrower can anticipate that the payday lending company intends to deposit the check that very day. If there is any exception to this process, it will likely be fully-disclosed in the loan documents.
There is a caveat to this normal process. Some payday lending companies want an opportunity to re-lend to its borrowers. The best way to assure they get that opportunity is to require the borrower to come back into the store on the loan’s due date or perhaps a few days prior to the date. This will give the employees an opportunity to propose the borrower simply pay the admin fee and interest and theoretically renew (rollover) the loan amount until the next pay date. Any post dated check left with the store during the original visit will get deposited if the borrower doesn’t appear prior to the due date.
All borrowers need to be aware there are substantial penalties for not abiding by the terms of a payday loan. Should the necessary funds not be available in the bank account when required, there will be NSF charges, administration fees and possible legal ramifications.