If we want to decide on a quick payday loan via the Internet or a payday loan at a stationary establishment, we must sign a contract. In it we commit ourselves to timely repayment of receivables – once or in installments. When we exceed the repayment date, we are exposed to the consequences indicated in the contract. They are dependent on the institutions granting payday loans .
It is best not to induce untimely indebtedness – if we exceed the repayment date, the lender may start charging certain fines from the first day. Unfortunately, they are often quite high, which causes our debt to increase.
First of all, we risk additional financial penalties – in addition to the interest on overdue debts, payday loan companies also apply additional penalties for reminder of debt reminders. Usually, the first prompt is sent after 7 days from the date of repayment, while interest is calculated from the first day of debt. If we do not pay the debt in the time set by the lender, the case may reach the debt collection company and then the bailiff, which means that the costs increase even more.
What are the penalties for late payment of the payday loan?
The annual rate of interest on overdue debt in case of default is equal to the rate of maximum interest for delay referred to in art. 481 § 21 of the Civil Code, namely twice the statutory interest rate for delay. Currently, the maximum interest rate for delay is 14%. The lender provides the client with information on the current amount of the annual interest rate on overdue debt.
On the other hand, the costs associated with prompting, or reminding the customer about debt, are already diversified and dependent on the payday loan company. As mentioned earlier, usually the first paid information is forwarded within 7 days from the required repayment date, but some companies charge the costs of the notification activities from 1 day of the repayment date. We can pay for received reminders, e-mails, phone calls and letter reminders. The costs are usually between PLN 30 to PLN 50 per prompt, but they can grow if they do not bring the expected results. The total costs may therefore be even more than PLN 200, when we will be late for a month to repay the payday loan.
How to protect yourself from a penalty for non-payment of a payday loan?
If we do not have sufficient funds to repay the payday loan, we have several ways to proceed. First of all, let’s check if the lender gives you the option to extend the repayment period – it is also called a grace period. Then we can postpone the repayment by the indicated number of days, but this is done for an additional fee. It is lower than the amount to be repaid, but it still increases the cost of the payday loan.
The second option, when our financial problems are more serious, therefore we will not be able to repay the installments in the current amount, even after the grace period, there is a reduction in the payday loan installments. This means an increase in the total repayment period and higher costs, but we can then save ourselves from high costs of payment and debt collection. Let’s remember to reduce the payday loan installments to the lender before the unpaid debt arises.