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Published 2018-06-25 09:00:00

Couple Reasons why you should always avoid Late Repayments of Payday Loans

You should never default on any type of loan. Payday loans or unsecured short term loans should always be repaid on time. Every installment should be paid on the exact date. Some loans have grace periods. You can pay your mortgage a few days later and there may not be any penalty or fine for the same, as long as you are within the grace period. From credit card bills to utilities, there is a window of a few days. In some cases, this may be a fortnight or longer. Payday loans and other unsecured short term loans do not have such a window.

There are two reasons why you should always avoid late repayments of payday loans. The first reason is the fine that would be immediately levied on your repayment. When you get quotes through Cash Carrot, you should delve into the details of the agreement and check out how much penalty or fine lenders would be charging if you does not pay an installment on the scheduled date.

The second reason why you should not miss a payment is the impact on your credit score. All debts are reported to credit bureaus. Payday loans are no different. Whether you repay on time or delay your repayments, both get reported. You can be sure that negative experiences of lenders will be reported sooner and they would have a more profound impact on your credit score.

If you repay a loan on time, there will be some positive impact on your credit score. This may not be as much as the negative fallout of missing a repayment or defaulting on the loan. The positive and negative impacts do not offset one another. More often than frequent, the negative impact will be more substantial. You would be charged a hefty fine and your credit score would take a hit if you fail even one installment.

Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk