Renew or Roll over a Payday Loan
Payday loan financing allows cash strapped individuals to meet their financial obligations. This particular type of loan is especially beneficial to individuals that have difficulty in obtaining loans due to poor credit history or not having collateral to secure the loan.
The payday loans possess a number of unique attributes that sets it apart from the traditional loans. One such attribute that we will discuss here is the ability to renew or roll over the loan. An understanding of this concept is important if you want to stay safe when taking on payday loans.
Renew or Rollover of Payday Loans: What does it mean?
Renewing, rolling over, or refinancing payday loans all mean the same thing: to get an extension on the loan by paying a fee to the lender. This course of action is usually taken by individuals that are not able to pay the loan on the due date.
The rolling over of the payday loan is governed by states laws. The specific regulations regarding this differ in different states. Some states impose limits or even ban the practice of rolling over the payday loans. You can find the specific state laws regarding the rolling over of payday loan by visiting the site National Council of State Legislatures website.
Generally, the fee amount that you are charged for rolling over the payday loan can amount to hundreds of dollars. This is in addition of the fees that is charged when you first obtain the loan amount. For instance, if you receive a loan of $400 loan with a net fee of $60, and roll over the loan four times, you may be required to pay $240 in fees to the lender. So, the total loan amount that you have to repay to the lender will be $640.
In the end, you must consider your decision to roll over very carefully. The reason is that if you don't known the financial implications of rolling over the loan, you may find yourself easily getting trapped into a debt hole getting out of which will not be an easy task.
Disclaimer Notice: The article/blog is intended for informational purposes only. You should not make any financial decision based on the information provided in this article, and without consulting with a financial expert.