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Good news! You have the option to cancel your payday loan whenever you want. However, please keep in mind that you might be charged interest for the duration that your loan remains open.
According to the terms and conditions of your payday loan agreement, you have the freedom to cancel your loan at any time, whether it’s on the same day it was taken out or even a week or two later.
To cancel your payday loan, you will usually need to get in touch with your lender by phone or in writing. Typically, this involves paying off the full amount of your loan, including any interest that has accumulated.
In some cases, certain lenders provide a “cooling period” allowing you to cancel your loan within 24 or 48 hours without having to make any payments or incur any interest charges. To take advantage of this option, be sure to carefully review the terms and conditions of your loan agreement, which you would have received during the application and approval process.
- You can cancel your loan at any time, but keep in mind that interest may be charged for the number of days it remains open.
- Your loan will be considered cancelled if you pay it off in full.
- Some lenders offer a cooling period of up to 48 hours, which means you won’t face any fees if you decide to cancel during this time.
- If you want to stop payments to a payday lender through your bank, make sure to reach out to the lender as well to ensure your account gets closed. Otherwise, you may still be responsible for paying any outstanding interest.
How to Cancel Your Payday Loan
Step 1: Reach out to your lender by calling, emailing, or writing to them. You can find their contact information on their website. Look for a login or ‘my account’ section where you can cancel the loan or pay it off entirely.
Step 2: Keep in mind that you may need to cover any accumulated interest. Payday loans usually accrue daily interest, so if your loan has been open for 3 days, you’ll have to pay the corresponding interest for the cancellation or deactivation.
Step 3: Once you receive confirmation from the lender, your loan will be officially cancelled, and you won’t be expected to make any more payments.
Why Should I Consider Canceling My Payday Loan?
Discovering alternative funding sources: In many cases, individuals seeking emergency funds may have applied for multiple loans on the same day, resulting in multiple loans being approved. However, if you only require one loan, you might consider canceling the others.
Furthermore, if you have found alternative funding, such as borrowing from family or friends, you may no longer need the payday loan.
Early loan repayment: Payday loans are often used to cover temporary cash shortfalls, such as emergency expenses or urgent bills. Once you have paid off these immediate needs, you may find that the loan is no longer necessary. By opting for early repayment, you can save on interest charges and potentially reduce the amount of interest you pay, sometimes down to just 5 days instead of the full 30 days.
Financial difficulty: Payday loans are known for their high cost, mainly because they are quickly approved and intended for short-term use. However, if you find that the loan is becoming unaffordable, especially when combined with other debts, it could lead to further financial difficulties. It is important to assess your financial situation carefully.
Exploring other options: While a payday loan may seem like the most convenient solution for obtaining quick cash, conducting a little more research can reveal cheaper alternatives. Consider looking into low-interest credit cards or utilizing the services of a credit union.
Can a Payday Lender Still Charge Me if I Cancel After 1, 3 or 5 Days?
Yes, it is possible for a lender to charge you interest if you decide to cancel your payday loan within a few days. Generally, once the loan is approved and deposited into your bank account, you will begin accruing interest of approximately 1% per day.
However, some lenders do provide a cooling-off period of either 24 or 48 hours during which you can return the loan and cancel it without any fees. It is important to review the terms and conditions to determine if you qualify for this option.
It is important to note that it is not unreasonable for lenders to charge fees, even if the loan is open for only a short time. Processing, underwriting, and credit checking your loan application incurs costs for the lender, and even a small payment can help them recover these expenses.
What is the impact on my credit score if I cancel a payday loan?
If you have already paid off or cleared your loan, without any overdue or arrears, you can be assured that there will be no negative effect on your credit score.
Is It Possible for Me to Request My Bank to Cancel My Payday Loan?
Absolutely! If you’d like your bank to cease accepting repayments from a payday lender, you have the option to make this request. However, it’s important to note that you’ll also need to communicate with the lender directly in order to cancel or close the associated account.
Is it possible for my bank to prevent payments to a payday loan company?
Absolutely! If you’d like to stop payday loan repayments from being deducted from your bank account, you can reach out to your bank for assistance in discontinuing these automatic payments.
Once your loan is approved, it triggers a process known as ACH authorization, which deducts payments from your account every month. By contacting your bank, you can request them to halt these payments. However, please note that if your loan is still active, you may still be responsible for any interest that has accumulated as well as any outstanding repayments.