Ways To Negotiate and Stay Away From Payday Loan Debt
One of the prime reasons for one to not being able to pay back their payday loan is that the interest rate is extremely high or out of their current financial range. The inconvenience might be momentary but that momentary lapse in inability to make repayments can cause a major dent in your future financial status. But how is that possible? You will find yourself buried neck deep in a hefty payday loan debt. The easier they are to acquire, the faster their build up on loan because of the high gross interest rate.
You are not obliged to predict the future forthcomings firsthand – nobody can. But do remember that even though it’s you who will have to face all the consequences, the lender, too, has a fair idea that you may not be able to make repayments on time, which means they must have a backup plan, and that is to let you negotiate your way out. They let you negotiate because they want the situation to work for the both of you – if they are true to their business ethics, that is.
On the other hand, it’s only an equally moral obligation for the borrower to follow the code of ethics as well and not borrow with the intention of never paying the lender back. It’s a two way street, you cannot expect the lender to be lenient in terms of interest rates and offering renewals. You NEED to know your credit score.
Now, that we have gotten that out of the way, let’s get down to some negotiation tricks – you need to stand strong on your ground with enough flexibility to meet the lender halfway.
The first and foremost action on your list as soon as you realize that you are not going to be able to pay back your lender should be to keep him in the loop and let them know of your financial inability – the more honest you are, the better. Always remember that your lender is not looking forward to the act of suing you and taking you to the court for a few hundred, it’s a demanding task, and everyone is hoping they can avoid it. Know that your lender is always up for a negotiation – if you are being fair of course, it’s benefiting them as well. Taking you to court would mean extra costs and losing a customer.
Think twice before you take money
The only thing you need to make sure is to be completely sure of your financial range. You need to know exactly how much can you pay before meeting up with your lender and offering a middle way. After clearing your financial position, decide how many installments you want your repayment be broken into. And how many installments will be sufficient in order to not cost you too many extra bundles of cash.
At this point, your priority should be to reach an agreement so that your case does not get transferred over to the collection agency – once that has happened, you lose all your negotiation power. A few pointers to always keep handy are:
- Acquaint yourself with your national laws and legal rights regarding payday loans. And make sure that you are able to recall them at will.
- If it does come down to the need to get help from a third party agency, make sure it’s a non-profit agency. None are recommended but if the need be, you should opt for non-profit.
And finally, once you have made all your successful negotiations, keep up with your payments on time and try your best to not default. If you do, all your effort to negotiate down to your desired contract, please don’t make it hard or you and your credit score.