We recommend speaking to your lender if you are unlikely to repay what you owe within the loan term. Some payday lenders might extend the payment deadline on request, giving you more time to pay back the money owed plus interest.
How Do Payday Loan Extensions Work?
Whether your request is granted or not depends on the lender's policies or the state's lending laws. A few states mandate lenders to extend payment deadlines if requested. Getting an extension may help delay collection actions, but they sometimes come with additional fees and interests. Some payday lenders can extend the payment deadline for free, while others might charge a fee.
What If My Extension Request Is Rejected?
There are several options to consider if your extension request is not granted. Some of them are speaking to a legal aid attorney, credit counselor in your area, or free debt advice organizations. You may also consider getting a debt consolidation loan, selling off items you no longer use, taking up freelance jobs, picking up a side hustle or other quick ways to make money.
What Else Should I Know?
Although a lender cannot arrest you for failing to repay your payday loan, failure to keep to your loan agreement can have a negative impact on your credit ratings. Depending on the loan amount and your credit score, it may also make it harder to qualify for low-interest loans in the future. If the loan contract allows, the lender may subtract the loan's cost automatically from your monthly wages (wage garnishment).
That said, a lender is not allowed to threaten, swear or bully you into paying. They may call your relatives, friends and loved ones to find out how to reach you. But they should not give them any information about the money borrowed. You can submit an official complaint to the Consumer Financial Protection Bureau (CFPB) if they do.