Payday loan lenders will work with you to get your payment, but if you continue to default on your loan, it will get sold to a collections agency. Business is business and a payday loan lender is a creditor which will try to collect then move you on to collections, same with banks and credit unions.
Payday loan lenders, like all creditors, expect on-time payment.
If you do have a creditor call you for payment towards your debt with the payday loan lender, what are some solutions you can use in order to help protect your credit? It is common knowledge that once debt goes to collections, one’s credit score will be negatively affected. If you act fast, you may be able to save your credit from the slap of defaulted debt.
One of the best solutions to this potentially hazardous problem is to pay your debt to the creditor, immediately. Many companies have not written the debt totally off and will still collect payment during the beginning stages of the collection process. Make an online payment to your creditor then call them and request that they recall or remove your name form the collections reporting. Creditors will report monthly, so you may have time to get your account off of the list. If it is too late, you can request that the next report time, your status gets changed to “paid in full”.
You may follow up on your request and take a look at your credit report to ensure the negative report was removed. If you see that the report is gone, you are in the clear; but if not, you will want to pursue the matter with documentation for the full payment as proof.
Not all bills are as small as payday loan lender debt, but the faster you can get any type of debt paid off, the better off your credit score will be. Long-term payoffs will eat away at your money charging interest for each payment period. Online payday loan lenders will charge high interest if the debt is not paid on time. It is a great incentive to make sure it gets paid. Be honest with yourself to preserve your budget when taking out a payday loan. If you cannot afford the quick payoff, then it may not be the best solution for your financial crisis.
The key to any type of debt is to keep it out of the hands of the debt collector. Make the minimum payment necessary and work at budgeting harder the following month in order to pay more towards your balance. Anytime you can bring the principle balance down, the less you will be charged on interest. Focus paying off one creditor at a time so results are much quicker. It is best practice to focus on paying off the smallest debt first, then apply the money spent towards it to pay off another that much faster.
Paying off your debt before it gets to collections is the best way to protect your future financing options. If by chance you do stumble with payments, use online payday loan lenders or other fast cash options in order to preserve your credit score. Family, friends or even selling off items from your home will get you quick cash to protect your debt form going into collections.
