Online small loans, or payday loans, are no credit check, short-term loans that you can borrow from direct lenders during dire financial situations. Even if you have bad credit, you are entitled for this type loan, which often starts from $300 to over $1000, or any loan amount just enough to help you get through your current financial needs. As with other types of loan, however, settling online small loans can be difficult and challenging, especially if you are past your due date. This can lead to troubles with your lender or to huge and mounting financial debt. There are two things to keep in mind to avoid such difficult situations.
Understanding the Small Loan Terms and Conditions
Understanding the terms and conditions of the small loan is a must when borrowing money online. The terms and conditions will include explanations about the interest rate, duration of payment, and fees for late payment. It is also important to watch out for, or ask about, hidden terms like service fees, rollover, renewal, or extension fees.
When applying for small loans, it is a must that you have a clear understanding of what the terms and conditions state. Ask questions and clear issues that seem vague to you. And before signing or closing the deal, make sure you agree to whatever the terms and conditions have stated.
Dealing with Small Loan Debt Collectors
In the event that you are not able to pay the loan as agreed, it is important to immediately inform your small lender about the situation. There are two things that your lender can do: either send your account to a collections agency, or extend your payment terms to, say, another month or so. Should your lender extend the payment terms for the small loan, watch out for some charges for renewal or extension of payment.
Some lenders may also choose to have a collection’s agency handle your account. Now, one of the frustrating aspects of settling small loans, especially overdue ones, is dealing with your debt collector. Collectors’ persistence and pushiness to collect the money you owe can be really annoying. While it is indeed their job to collect debt, the Fair Debt Collection Practices Act mandates that they exercise fair treatment and proper debt collection practices. Thus, reporting incidences of harassing phone calls and letters from debt collectors is proper.
Online small loans have proven to be very beneficial during situation that requires instant cash. This type of loans, however, comes with huge responsibilities on your part. Knowing your responsibilities and rights, as well as adhering to what was agreed, are the best ways to avoid troubles with your small loan lender.