Category ArchiveMore than one small loan

What to Do if One Did Not Manage to Pay a Small Loan Back in Time

Payday loans are issued to households with moderate income. They often lack stable work. Their monthly income is not very high. Financial instability does not give a chance to many Americans to return a payday loan in time. This can lead to very negative consequences. A borrower has to have a clear understanding of what to do if he/she can not return a credit in time.

Actions to Take

A short-term credit issuance process runs similarly to the process of long-term credits issuance. A borrower has similar obligations. The only thing that differs is the sum of a credit. A loan agreement is a key document that determines the terms and conditions of credit taking. These documents have to be written by professionals. It is good if it includes clauses on consequences if a small loan is not paid in time by a borrower.

Each borrower has to remember that the loan agreement is a legal document. In case a small loan is not returned in time, the lending company may bring a borrower to a trial. Here are several things that a good loan agreement should contain:

  • Return date. This date is very important to every borrower. When this date comes, a lender will withdraw loan body plus interest rate from a person’s account. If money is not there, a lender will contact a person. Financial company will ask when money will be returned. From that day on a borrower be charged an additional fee on a loan. If one returns a loan a week after a return date, a fine will be moderate. This will be 1% percent of credit body.
  • Fine sum. It is very important that a loan agreement contains a certain statement of what a fine should be. It is usually stated percentage wise. If the contract does not contain such information a borrower is in big trouble. A sum of a fine will be determined by court decision.
  • A clause on what process will be if a person does not return money in time. In the majority of cases, it will be taken to court. A lender will state at a court, a borrower did not return a loan back in time. Financial company will employ a lawyer, who’ll lead the case.

If one does not pay a borrowing when he/she has to, the lender will start a juridical process. There is only one exception. A borrower can guarantee his credit by personal property. In this case, a lending company will appeal to a court with the request to confiscate the property.

In case a lender did not guarantee a borrowing with the property, he/she will be assigned a fine. If a return date comes and a borrower does not have money to pay, he/she has to contact a lending company. Financial company will appreciate that a client informs about the problem. It is good if one can state the date when he/she will be able to return the loan. During the conversation, one should ask how much his fine should be. It is good to immediately employ a lawyer.

This is the main thing a person should do. If one employs a good lawyer, a process will run smoothly. He/she will need only to pay a fine.

Is It Possible to Take a Small Loan from Several Organizations

American people cover some basic expenses with short-term loans. These borrowings are very important to them. They help a lot in the time of financial troubles. Some borrowers think that it is possible to take a payday loan only from one financial institution. It is not the case. One can take several payday loans.

Several Credit Providers

Small Loans are issued to people of the full legal age only. A person can get several small loans. There are no limitations. It is important to remember several rules if one takes credits from different providers:

  • If one applies for another small loan, he/she has to state how many credits he/she currently has. It is important not to hide this information. In case one hides this fact, a financial organization can sue him/her. Financial companies need to know how many small loans a person has. This information helps them to evaluate the risk of loan issuance. If a person has several credits, the chance he/she will return money back is not that big.
  • One has to take moderate borrowing from financial companies. The sum of financial loans fluctuates from 300 – 1900 dollars. It is not a good idea to ask for a maximum amount. An interest rate then will be higher. There is a high chance a person will not be able to pay credits on time.
  • If one pays several small loans timely, the financial score will get higher. A credit score is a very important characteristic. It shows how well a person is able to pay borrowings back. Short-term credits give excellent opportunity to top up a score. In case a person has a high score, he/she can get a big long-term loan.

These are the main things to remember. Taking several small loans is very beneficial. If one wants to receive 1800 US dollars, it is good to take three small loans. In this case, one will be assigned three return dates.

It is always good to remember about return dates. It is a date when a borrower has to pay a credit back. If he/she does not do it, he/she will get in trouble. A lending company will penalize a borrower and it will be necessary to pay a body of a loan, interest rate, and fine.

Some borrowers worry their employer can learn about small loans they take. Employers will not know a person takes one or several credits. In case a person does not pay a small loan back in time, a lending company can take the salary on its account. If this happens, an employer will get to know about a borrowing.

One can take several credits without the problems. It is always good to read a loan agreement the financial company proposes. Some lenders state they will not issue a loan to a person who has several small loans. In such case, one cannot apply for a small loan. Taking numerous small loans is not forbidden, the most important is that one pays the loan back timely.