If you want to pay back your payday loan early, you’re first going to need to know your lender’s policy on early repayment. We can’t speak about the specifics within other Canadian companies, but the general rule is that there is no penalty for repaying your payday loan before your due date. Some lenders, GoDay.ca included, will even reward you for early repayment! Rewards vary from company-to-company, but can come in the form of;
-A cash bonus.
-A discount on your next payday loan fees.
-An improvement on a “trust” score (which could make you eligible to borrow more even earlier, if you meet other criteria & it’s thought to be a responsible fit).
-Another form of monetary incentive.
A payday loan company should never charge you an extra fee to repay your financial commitment earlier than scheduled. Most lenders should be more than happy to accommodate your request & make it incredibly easy for you.
For your protection
Before you make an early re-payment arrangement, ask the following of your lender:
-If I end up not being able to repay on the earlier date, will I be charged a late fee or will my pre-existing due date still apply?
-Will I be charged an additional fee to pay my loan back early?
-Are there any incentives available to repay early?
-Will the funds be removed in a different way other than what is outlined in our agreement? (If your loan is with an online lender).
-What specifically do I have to do or bring if I want to pay back early? (If your loan is with a store-front retail lender).
-Will paying back my loan early affect my ability to re-borrow in any way that is positive or negative?
-Will paying back my loan early help me re-build my credit? (If you’re part of a credit fixing program with your lender).
Once the terms and conditions of your early repayment have been established, you should receive written confirmation from your lender outlining the changes in your agreement. This is necessary for legal purposes for your protection and your lender’s.
Why would I want to pay back my loan?
If your cash-flow situation improved, it might be better for you to pay back your debts in order of most-pressing sooner rather than later. You don’t want to be tempted to spend the money elsewhere if it’s unnecessary. Additionally, if you find yourself in not-the-best circumstances with your lender (perhaps you made a late payment recently), paying it back early can help balance out that indiscretion. If you’re unsure about early repayment, talk to the loan officer who handled your application. They might be able to help you determine whether or not paying your loan back early would help you or not. If paying it back early will cause more of a financial strain, then it’s probably not a good idea.
The bottom line? If you can pay back your payday loan earlier than expected, it can only improve your relationship with your lender.
Want more information your rights as a payday loan consumer? Please visit the Ministry of Consumer Services website for a detailed list of your rights and responsibilities here.