Is it worth extending the payday loan?Payday Loans
Have you miscalculated and want to extend your payday payback? Loan companies themselves urge borrowers to extend. So you shouldn’t have a problem with that. However, as you guessed, the extension of payday pay is not free. The fees may be large but are limited by the anti-usury act, which clearly specifies how much non-interest costs can be up to. Therefore, the law protects us against excessive costs of extending loans. More exposition at capraia.biz
Unfortunately, the anti-usury act has the disadvantage that it greatly limits the extension of loans, so a normal extension of a loan is not profitable for loan companies. It should be remembered that the loan company bears a high risk, because even 35% of clients do not give back borrowed money at all, which is why the company has to somehow offset it in fees. Instead of getting an extension in the original company where you took payday pay, you are directed by the company to a company that cooperates with it, which “refinances” your debt. Refinancing is an effective way around the statutory limit for payday extensions.
Refinancing a loan – is it worth it?
Refinancing is not equivalent to an extension, as some people think. You refinance the instant payday loan in a completely different company, and you get the extension in the same company as your original payday loan. What to do then? Is it worth extending the payday pay?
I will give you a simple example. You want to take a USD 1,000 loan. What can you do and how do you get out of it?
Instant payment can be extended in the vast majority of companies for the price exactly the same as if you had taken a new paid loan. You can extend (refinance) the loan for 7.14 or sometimes 30 days or 60 days. In any case, you will have to pay back the maximum amount borrowed within 30 to 60 days.
However, there is another option – installment loan. You pay the installment loan in installments of up to 4 years. It would be good if you didn’t take payday pay for more than you can pay back. Why? Because you won’t pay it back on time and you will have to refinance it, or you will take another payday loan and fall into a payday spiral.
So when you earn, for example, USD 1,500 do not take payday payday with a repayment deadline of 30 days for USD 1,000 because the probability that you will be able to pay it off is like in this song “less than zero”. You’d better get a 12-month installment loan. You will be able to sleep peacefully, because you will pay it back on time.
An installment loan better than extending payday pay?
Do you want to see what it looks like on the example of loan companies? I will give you some examples – in my rankings you will find a dozen or so loan companies and dozens of payday loans. I chose a few of them so that you would know what it might look like. I assumed that you borrow USD 1,000 for 30 days, 60 days, 90 days, 120 days and attention – 365 days. You probably think that the longer the loan period, the higher the cost? Not completely.
|Business||Freezl. en||Creditstar||ned heat||Incredit||Hapipozyczki|
|Amount||1000||USD 1,000||USD 1,000||USD 1,000||USD 1,000|
|Loan period||30 days||60 days (2 months)||90 days (3 months)||120 days (4 months)||365 days (1 year)|
|The cost of the loan||USD 282.60 *||312.54 USD||USD 216.17||USD 370.90||120.08 USD|
|How much will you pay||USD 1282.60||USD 1,312.54||USD 1,216.17||USD 1,370.90||1120.08 USD|
|Amount of installment||USD 1282.60||USD 652.67||USD 405.57||USD 342.74||93.34 USD|
|The maximum loan period||35 days||90 days||24 months||12 months||36 months|
|Submit an application||Proposal||Proposal||Proposal||Proposal||Proposal|
* cost of free loan not repaid on time
Look at the cost of the loan in the table – between the shortest loan period of 30 days and the longest with 365 days is something that I did not believe until I checked it thoroughly. A paid installment loan turns out to be much cheaper than a free loan you won’t pay back on time.
It is better to pay the installments calmly than to worry about where to get USD 1,282 in a month. The amount of health saved is priceless. Remember that the worst thing that can be an unpaid loan – it is quickly directed to external debt collection, and there the costs become horrendous.
In addition, instead of catching payday, afraid of the cost of installment loans, use my installment loan comparison service and choose one with a low installment and longer loan period. The best part is that with installment loans you can immediately take a larger amount of USD 20-25 thousand for up to 48 months and payday loans are up to USD 2,000 and only for a short period. In addition, you will admit that it is easier to pay back USD 93 per month than USD 1,282.
A new free payday loan instead of an extension of the old one?
A very common solution found among people who do not want to pay for the extension of payday pay. There are many free payday loans. In my quick internet loans ranking you can find a whole lot of them. However, I do not recommend such a solution, because it is easy to lose control over the debt and fall into a loop of payday loans. My readers, record holders, have 5-6 payday loans at the same time. The end of this risky game is foreseeable at best they can come to me for debt relief.
Is it worth extending the payday loan or not?
So if you want to extend your payday loan, don’t do it, just choose a loan for a longer period. This will provide you with financial comfort. However, you must think about this solution before your payday payment is due. you must be aware that information about the past due payday may be in BIK, which sometimes closes the path to getting a loan in installments.
If you do not know what will be best for you, use my comparison websites or write in the comments – in my free time I will try to help you.
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