In this article learn about what is the payday loan extended payment plan and how you can avail it.
Payday loans are short-term loans, where you are expected to pay back the amount due on receiving the next month’s pay check. That is, you must pay back in 2-3 weeks time. Most people do this and stay in the right side of the law, and qualify for another loan in time. But sometimes, even those who have the best repayment history can face a temporary situation where they aren’t able to pay back on the due day.
So what do you do then? If you cannot pay back the payday loan on time, then there is no immediate worry for you. There won’t be an upcoming onslaught of debt collection calls. That’s because, there’s something called the “Extended Payment Plan”. Thanks to this, there won’t be any high fees and bank account debits as well.
Protection for Consumers
If the lending agency is a member of the CFSA (Community Financial Services Association of America), they cannot force you to repay the amount. No coercion practices are allowed. The lending company must give you time till the next four paydays to repay the amount due. No extra fees can also be charged for this. All CFSA member agencies should carry the CFSA logo in their websites. It should also be displayed in their office, if they have a physical presence. So look for the blue oval logo to be sure that the agency is a member of the CFSA. Be sure, as not all agencies are members of the CFSA.
CFSA Best Practices ensures that consumers who aren’t able to pay it back on the due date can ask for the EPP or the Extended Payment Plan. When you make the application, you will get several more weeks time by when you can pay back your debt. And like mentioned before, you cannot be charged for this delay.
State and Federal Laws
There are specific laws in some states as well that can give you protection if you are not able to pay back the loan on time. Lending agencies that are not members of the CFSA must abide by these laws. You may also check at the attorney general’s website of your state to find out the state laws that apply.
In the US states of Virginia and Utah for example, you will find brochures and websites where there is information on the consumer protection laws about payday loans. There is federal protection too, but that is less, compared to the state laws.
What You Should Say When You Cannot Repay
You must let your lender know before the business closes on the last day when the amount is due. But it’s wise not to wait till the last moment. Call up, or send an email early. We recommend at least one business day before inform them that you may not be able to pay.
Do what you did, while you applied for the loan. Go to their office, contact online, or call up. Carry a print out of this page. This page mentions all the details of the Extended Payment Plan. If you are sending an email, then refer to this page in your content. No payday lending agency can deny you. This is simply not legal.
Clearly mention that you want to apply for the Extended Payment Plan. You will then be asked to sign a new statement, where you must agree to a new payment schedule. This is your amended loan agreement. There will be four equal payments, spread out over the next four paydays. The fees you owe already will be included. But no new interest or fees can be added. The lending agency cannot send a collection agency or hassle you to pay up forcefully before, that is of course, if you honor the new payment schedule.
But remember, there is a catch. You are allowed to apply for the Extended Payment Plan only once in a year with each payday lending agency. And that is it. Also, there can be a state law that makes it a bit different. You must then abide by that law.
What Happens If You Default
Also remember, if you default on the new payment schedule, then the lender can charge you an Extended Payment Plan fee. The lending company can also accelerate payment on the balance that is due. This is authorized by law. Any additional charges or fees payable when you default will also be mentioned in your new agreement. So make sure that you honor the new payment schedule. Make every effort to do so.
It’s up to you how you want to repay the debt. You may pay up in cash in equal installments over the paydays, or you may allow the amount to be deducted from your bank account. But whatever it is, you have to agree in advance. Most lending companies won’t let you change the mode of payment after you have agreed.
Also keep in mind, you cannot take another loan till the time your entire due amount is cleared in full.
Paying Up Fully Before the Due Date
If you want, and are able to, you can also clear the entire debt in one full payment. Some payday lending companies ask debtors to do so a few days before the due date. So check with your lender. Also, many of them ask for such payment in debit or cash only. You can of course take another loan if you pay it back fully before the due date.
You can still repay in full even if the first payment of your amended contract has already been deducted or paid. The amount due will of course be adjusted accordingly.
What If the Lending Company Doesn’t Agree?
Legally, there is no way for a CFSA member agency to deny the Extended Payment Plan. However if the lender is still not agreeing, then you can approach the CFSA. You should then call the CFSA hotline number 888-572-9329 between 9 and 5 Eastern Time. You can send an email as well to LoanQuestions@CFSAA.com. There is also a form at the CFSA website that you can fill out to lodge your complaint.
Payday lenders in the United States become CFSA members to avail several benefits such as tax deductible trips to different conferences held at Florida, California and other places, and also to represent them in Washington. A free extended payment term is a price all member businesses agree upon. So they should honor this.
So you see, there is really nothing to worry about payday lending, though the critics will tell you otherwise. Consumer interest is high in the agenda of most lenders, and the Community Financial Services Association of America. Consumer interest is always protected. So go ahead and take the short-term loan you want. You can apply on our site as well anytime you want. Please click here to apply for a fast payday loan. Your application will be processed and approved quickly. Solve your temporary financial situation today.
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