Stop Payment On A Payday Loan

Many people run out of money before their next payday and resort to borrowing from a payday loan lenders.

Payday loans are high interest loans which are given to people when they desperately need money but this loan must be repaid when they receive their next paycheck. The repayment has to be made before the check which is with the payday loan company bounces. This is a vicious cycle as people will resort to another payday loan to pay off the previous one and this will continue endlessly.

In order to avoid any check bouncing, you have to take all the possible steps to protect your ability to maintain a checking account and your credit score. All lenders give payday loans against checks to secure the loan and it also makes it easy for them to collect the money directly from the borrower’s bank account. Therefore, it is imperative that you do not write checks if you do not have sufficient money to cover the check amount.

However, at times it might not be possible to avoid writing a check. If that happens there are ways and means of issuing stop payment on a payday loan. Notify your bank well before the due date of the payday loan. If you tell your bank orally, the instructions will only last for 14 days. You have follow up your oral instructions to stop payment on a payday loan with a written notice.

Bank fees for stopping payment on a payday loan check can vary from $18 to $32 and the same amount is charged if a check bounces because of insufficient money in your checking account.

A stop payment on a payday loan instruction will be valid for 6 months. Stopping payment does not cancel the contract to repay the payday loan. Different states across the US have different laws governing the stop payment on a payday loan and this can put you at a legal risk. Please check your state laws to understand the legal implications when you issue a stop payment on a payday loan.