Saturday, December 1, 2012

Can Someone Else Pay Off Your Payday Loan Debt?

As you are probably already well aware, payday loans are one of the most versatile borrowing options available in the current market. However, does this versatility extend to payments from another person?

The answer to this is largely dependent on who you choose to borrow with. Some companies will have stricter policies than others when it comes to who repays the debt, meaning that not all will be able to accommodate you. To find out whether your payday loan lender can help or not, it's important that you check their terms or contact them directly beforehand.

To avoid this issue, you may wish to pre-empt it a little and ask friends, family or whoever else may be willing to cover the loan to transfer the funds into your account before the repayment date. This way you can still benefit from somebody else paying off your debt, but without the risk of missing the agreed date with your lender.

When it comes to covering the cost of any loan, you need to make sure that there are as few obstacles as possible. Generally this means ensuring that you have the appropriate funds as and when required. Should you fail to achieve this, then you could well find yourself receiving a number of charges.

One of the major differences between payday loans and other forms of lending is that the borrower will always need to repay it in single instalment. With interest of up to 25% on top of the original figure along with any other charges, it can be quite expensive - albeit this is dependent on how much you receive in the first place.

The actual repayment will be automatically arranged for your next pay date (as long as this is within 31 days of the initial application). For most lenders, this date will be nonnegotiable; therefore it is at this point that you need to have the money. You can choose the day after your salary is deposited, just to avoid any potential issues; however, to do so you will need to clarify this at the time you first apply.

Most payday lenders will only use a single bank account to transfer funds in and out of, which is where difficulties may lie when it comes to having a secondary pay it off on your behalf. This will need to be arranged well in advance of the repayment date, otherwise you may still default. As previously mentioned, not all lenders will be able to facilitate this process, which means that you should check first.

The easiest way around this is to simply ensure, one way or another, that your bank account has the required funds. Taking out a secondary loan certainly shouldn't be done without due care and consideration, which is why you may ask someone else to cover the cost on your behalf. As such, if you are short on cash in the days leading up to the due date, make sure you ask for help; perhaps in the form of a direct bank transfer, which should take less than a day in most cases, or a cash deposit through your bank. Only then can you guarantee that you won't default or accrue the charges and additional interest that this brings.

So to summarise, only in the very rarest of cases would a secondary person be able to cover the cost of your payday loan. This would need to be arranged with the lender and may also come with an additional cost in some circumstances. Therefore, it is always advisable to have the money in your account, one way or the other.

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