Short-term loans are an effective option for those who need cash for emergency situations or do not have enough money in their bank accounts for bills that are due soon. While you may find applying for a short-term loan online easy, you could have a harder time knowing how lenders expect you to pay back your loans. You might often wonder whether paying off a short-term loan is different from paying other credit obligations like a credit card.
Repaying a personal loan is easy if you follow these steps:
1. Check Amount Owed
Like with other loans, it’s important that you check the total balance owed for your short-term loans so you know whether you will be able to have the funds to pay your loans back. In addition to confirming the balance owed, you should be sure to add in the charges associated with borrowing the money as well as other fees for late payments or extensions if you aren’t already included.
2. Make Sure Bank Information is Accurate
When you sign up for your loans, you will have to enter in your bank account information so lenders know which accounts to withdraw from. Electronic payments through automatic withdrawal make it convenient for you, as you do not have to worry about writing a check and mailing it in time. However, it’s important that you provide your lenders with accurate banking information so the companies can withdraw the money from the correct account.
3. Know the Repayment Due Date
After lenders approve you for loans, they will tell you the due date so you can prepare funds for repayment in time. The type of personal loan will usually determine when the repayment due date is. While lenders expect you to pay back installment loans over the course of 18 to 24 months, the repayment schedule for payday loans is usually shorter.
4. Determine If You Need an Extension
Some lenders will provide an extension for the loan if you need more time to pay off the loan and want to avoid defaulting or being late on the loan payments. Depending on your state of residence, you have the option to contact your lenders as soon as you believe you are unable to repay your loans by the due date and refinance. You will have to sign an amendment to your original loan agreements and might have to pay a fee for refinancing.
5. Request an Alternative Method of Repayment
In addition to a requesting an extension, you have other options for repayment if you contact lender representatives. Lenders could offer a courtesy extension for paying back your loan. You also have the choice to enter into an extended payment plan, which will change the current payment schedule. There is no charge for agreeing to an extended payment plan with a lender like Cash Central. Depending on your state of residence, you can make partial payments to reduce your principal balances. For more information on paying back short-term loans, visit Cash Central’s Resource Center.
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