A payday loan rollover means your lender gives you longer to pay back your loan. Your lender may be able to offer you a payday loan rollover if you are having problems paying back the loan. The idea is that by extending your payday loan you will be able to pay it off with less late fees for the risk of bankruptcy.
How does a rollover work?
If you approach your lender and express that you’re having difficulty paying back your loan, they may offer you longer to pay it back; this is called a rollover. A rollover is a new agreement between you and the lender for the repayment of the original loan. A rollover is a new legally binding contract that gives you longer to pay off the originally agreed upon amount.
Am I eligible for a rollover?
Whether or not you are eligible for a payday loan rollover depends entirely on your lender. Different lenders will have different rules for what constitutes needing a payday loan rollover. The best way to find out if you’re eligible is to get in contact with your lender. Be upfront and honest with your lender and explain your difficulties to them. Often lenders will be keen to offer another solution to help you pay off your loan, so it’s always worth asking.
What are the downsides to extending my loan?
There are potential downsides to extending your loan and agreeing to a rollover. Because you will have longer to pay off your loan that means the money you have borrowed will accrue more interest. The longer it takes you to pay off your loan the more interest you will end up paying back to your lender.
There are often also extra fees or charges associated with a rollover. Your lender will make you aware of these before you agree to a rollover. Legally, your payday lender should not offer you more than one rollover. The more rollovers you have, the more interest you will be paying on your loans.
When lenders offer your rollover, they are required to provide you with an information sheet directing you towards free financial advice. A rollover is not a decision to be taken lightly and it’s wise to discuss something like this with a financial advisor or similar professional.
What are my other options if I am struggling to pay back my loan?
There are plenty of other options for people who are struggling to repay their payday loans. While a rollover is one option and maybe right for some people, it’s worth considering all of your options. The first thing to do if you begin falling behind with your payday loans, are becoming stressed about mounting debt or are feeling overwhelmed about your financial situation, is to contact a financial advisor. Many charities will offer free financial advice to those who need it, so getting the help you need doesn’t need to cost you. A financial advisor will be able to look at your unique and specific financial situation and advise you the best route out of debt.
The one thing you shouldn’t do if you’re struggling to repay your loans is to stop communication with your lender. It is always a good idea to keep your lender updated on if you are having trouble repaying your loans. Many lending companies will be more than happy to arrange a different payment schedule that suits you better.
There is also the option to file for bankruptcy, although filing for bankruptcy can have a massive negative effect on your credit score, meaning you will have more trouble borrowing in the future.
Payday lenders do take uncooperative customers to court, so whatever you do, do not just stop paying your loans with no plan. the longer you let your debt build up the more difficult it will be to sort. If you’re feeling overwhelmed or unable to pay your debts, do you get in contact with a financial advisor and get the support you need.