How to Cancel a Payday Loan

How to cancel a payday loanIt’s normal to have second thoughts after making a purchase, and make no mistake, taking out a payday loan is a purchase. You are buying money at a premium price. So if you go online and find out that maybe getting a payday advance wasn’t the best idea ever, you may wonder how to go about canceling it.

Most payday lenders will give you the next business day to change your mind. At that point you simply return to the lender with your loan agreement and the money they gave you and they will rescind it. This makes it like it never happened, and you only have to give them the original money they paid you, not the fees. But what if you go longer than one business day and you want to get out of it, is there anything you can do?

Most loan agreements will stimulate that after the period of time elapses the full amount of the loan plus the fees is due. This means that after the close of business the following day you are obligated to pay back the entire loan, plus all of the fees they’re charging. It may not seem fair because you’ve only had the money a short time, but that is part of what you agreed to when you took out the loan.

And some lenders don’t even give you that period of amnesty. They want the loan plus the fees right after you borrow it. That’s why it’s important to read through the terms and conditions of the agreement before you sign it. Some documents you don’t really have to read through, but this one is an important one and can come back to bite you if you don’t know what you’re getting into.

Guide on How to Cancel a Payday Loan

We recommend going with an offline lender in your local area. There are many benefits to this, and the most important one is that they’re going to be regulated by the state you’re in, in most instances. Some states, like Nevada, don’t regulate payday lenders. Other states, like Michigan and Illinois, will have certain guidelines that the lender must follow in order to stay in business. They are pretty much terrified of breaking these regulations, because the state has the power to shut them down. This means you can be sure they are on the up and up.

The reason you want to go with a brick and mortar lender is because they will usually be required to give you that time to change your mind. In some states it is the end of the second business day, and others may offer more time. You have to realize that this is for your protection. It gives you a cooling off period for you to get your head right in case a lot of things happened in one day and you rushed into something in the heat of the moment.

If It Were Up to the Lender…
It’s not really the lender that wants you to be able to cancel, and in fact as soon as you are done signing the agreement they would want payment in full if they had their way. But these laws and rules are in place to protect the consumer, and it’s a good thing they are.

Unfortunately, once you’ve passed that time, there’s not much you can do to take it back, and you’re stuck with the fees. It may be a rough lesson to learn, especially if you took out a sizable loan, but it might teach you just how expensive it is to borrow this money, and you will definitely think twice before taking it out again.

Negotiating with the Lender
You can always try to negotiate with the lender if you are past the amnesty period, but far from your due date. Let them know that you made a mistake and you’d like to see about splitting the difference on the fees if you pay it off early. This will really only work on the smaller, mom and pop type outfits, and the national chains aren’t going to go for it. You can also try it in states that are unregulated. They might agree to it as a sign of goodwill.

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