How Easy is it to Cancel a Payday Loan?

In most cases, it is straightforward to cancel your payday loan at anypoint during the loan’s lifetime. However, you must be aware that this process can come with costs including paying off the accrued interest of the loan.

If you no longer require the borrowed funds or have found a better alternative to your payday loan, before canceling your loan, you should fully understand the process so that you are not faced with unexpected payments. 

In this guide, Ready Payday Loans will help you understand the implications of canceling a payday loan.

Is it Possible to Cancel a Payday Loan?

Yes, canceling a payday loan is indeed possible, but it’s very important to be aware of potential costs and conditions associated with doing so. 

Payday loan agreements typically include provisions allowing borrowers to cancel their loans at any point. However, borrowers should expect to pay accrued interest for the duration the loan remained open (and in some cases an early repayment fee).

Some payday loan companies will offer a cooling-off period, typically lasting 24 to 48 hours, allowing borrowers to cancel a loan without incurring any fees or penalties.

Why Would I Cancel My Payday Loan?

There are several reasons why borrowers may choose to cancel their payday loans.

For instance, borrowers may secure funds through alternative means, such as personal loans from family or friends, making the payday loan unnecessary. Sometimes upon further research, borrowers discover other financial products have lower interest rates or more favorable terms, prompting them to cancel the payday loan.

If borrowers find themselves unable to afford the payday loan repayments, canceling the loan may offer some relief to their situation. Paying off the payday loan early can help avoid additional interest charges.

How Do I Cancel My Payday Loan?

Canceling your payday loan typically involves contacting the lender directly via phone, email or by written correspondence. Most lenders provide contact information on their websites or through a dedicated customer portal. 

Once you have contacted your lender to cancel the loan, borrowers may be required to pay off the loan in full, including any accrued interest up to the cancellation date.

What Costs Are Involved In Canceling My Payday Loan?

Canceling a payday loan may incur costs in the form of accrued interest. Payday loans often accrue daily interest, meaning borrowers must pay interest for each day the loan remains open. 

Therefore, the longer the loan remains active, the higher the accumulated interest that must be paid upon cancellation.

Will Canceling a Payday Loan Affect My Credit Rating?

Canceling a payday loan typically does not impact a borrower’s credit score, provided the loan has been repaid or cleared without default. 

You should confirm fully with the lender that the loan account is closed to avoid any potential discrepancies that can lead to damaging your credit score.

Can a Payday Lender Charge You if You Cancel After a Few Days?

Yes, payday lenders may charge interest even if borrowers cancel their loans after a short period. Lenders incur costs associated with processing loan applications and may charge fees to recover these expenses. 

However, some lenders offer a cooling-off period during which borrowers can cancel their loans without incurring additional fees. Before agreeing to your payday loan, read the terms of your loan in detail to check if you have this option.

Can You Stop Payments to a Payday Loan Company?

Yes, borrowers have the option to request their bank to stop automatic payments to a payday loan company. This process, known as ACH authorization, allows borrowers to prevent further withdrawals from their bank accounts. 

Borrowers should ensure that the loan account is closed to avoid any outstanding repayments or accrued interest.

Consider The Costs of Your Loan Before Applying

While canceling a payday loan offers borrowers control over their financial commitments, it’s crucial to understand the associated costs and implications. 

Remember, if you are canceling your payday loan, strong communication with your lender will prevent any unexpected additional payments on your loan.