Since many people take out payday loans each year, it is understandable that some may find it difficult to pay back the money in full. If this is the case, you can lessen your outstanding debt by making partial payments on your payday loan, but you will almost surely experience some consequences. However, they are very minor and you can easily avoid it.
Before you do anything, make sure to ask your lender if they accept partial payments as you might also need their express permission. We at Money Wise do the exact same thing. You will get to know more about us as you read further!
What is a Payday loan and how do Payday Loans Work?
Payday loans are short-term, unsecured loans where the borrower receives quick cash from the lender to cover expenses until their next paycheck. Usually, they are used to pay for unforeseen emergencies like car repairs or medical expenses.
What is a Partial Payment ?
A partial payment is when a borrower makes a payment that is less than the full amount due on their scheduled loan debt. Almost always, partial payments occur as a result of borrowers’ inability to complete their full payments within the required timeframe.
How to make a partial payment ?
Partially paying a loan is only permitted when the lender agrees to it. Different lenders will have different levels of understanding. In some cases, a lender would even set a deadline for the borrower to finish their payments later on with little or no penalty.
Partial payments, however, almost always have a negative impact on borrowers’ credit scores and may even incur late payment fees. Because it can be better than nothing and will still be deducted from your total debt, many borrowers choose to do so.
Making a Partial Payment: The Process
If you have no other options, this shouldn’t be your first choice because it will probably lower your credit score, but if you have no other choices, it may be preferable to not paying anything at all.
Ask your lender if they will accept a partial payment when you get in touch with them. They might even waive your late fees if you’ve been making all of your prior payments on time and in full and have a good working relationship with your lender. Lenders typically make repayment easier by allowing you to skip a payment or modifying your due date.
Ask if there will be a late report for this partial payment and if there will be any fees associated with it. Whether a challenging event in your life is the reason you are unable to make your entire payment, you might even see if your lender offers consideration plans for unique situations.
If your lender grants your request to make a partial payment, make sure to have a plan in place to make up the difference so that you don’t fall behind each month. If you get behind on your payments, you risk being listed as being past due each month, and th