Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a broker not a lender.

Jun 27, 2018

Discuss the Terms of Auto Debit before Signing an Agreement for Payday Loans

Most people who opt for payday loans do not have the liberty to choose other types of secured or unsecured short term loans. When you apply for payday loans through Payday Pug, you may be in an urgent need of some cash and this may drive you to quickly compare the quotes and choose one that offers you the loan amount you seek at a reasonable rate of interest. You may choose the offer with the least interest or you may go with a lender that has the fastest turnaround time. Howsoever you choose to compare the quotes and whichever lender you prefer, you should study the terms of the agreement and only then sign up for any type of short term loans.

You would find in the terms of the agreement a section dedicated to auto debit. This is imperative if your lender is going to deduct the monthly installments from your bank account on a predetermined date and time, usually after your paycheck gets credited. As a borrower, you may or may not have any say in this. Many lenders will not offer any other repayment method but auto debit. This is an automated electronic transfer of fund. Since you don’t have to authorize the auto debit on the day or even before, there is little you can do about an impending installment and hence automated transfer. Your paycheck may not get credited in time. You may have to withdraw more money than usual. You might want to delay the auto debit by some time or a few days.

Anything you want to know about the auto debit and the terms that would regulate the electronic transfer should be discussed with the lenders as you compare their quotes for payday loans. Don’t sign up without knowing the repercussion if an auto debit fails for some reason.

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Representative example: if you borrow £550 over 18 months at a flat rate of 180% per annum (fixed) with a representative 770% APR you will make 18 monthly payments of £113.06, repaying £2,035.08 in total. Rates from 45.3% APR to 1721% APR. A short term high cost loan should not be used as a long term solution. We are a broker not a lender. We don't charge fees. We don't sell your personal information. We may receive a commission from the lender.

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