Finding yourself in a situation where you're unable to pay off your payday loan on time can be gut-wrenching. Bills needed to be paid, food put on the table... and you were so sure you could make it work when the next paycheck came in! There's no need to worry though: in most cases you may qualify for one of the payday loan extended payment plans that are mandated by your state, or the Community Financial Services Association of America (CFSA.)
Extended payment plans for payday loans are offered by lenders to prevent borrowers from defaulting on their loan. These plans are in place for your protection and will not cost you any extra money, provided that you pay your extended payment plan (EPP) instalments on time.
When you find yourself in this unfortunate predicament, it's important that you know it's your right to be offered a payday loan extension. Almost every state has strict guidelines in place, which lenders must adhere to. Your lender is obligated to offer them, but state and CFSA regulations only entitle you to one every 12 months (you need to be very careful and do your homework before you borrow.)
Some lending companies will try to steer you away from using these extended payment plans, so you must be firm. If you know that you can't pay the loan on time, they must offer you an extension plan. If they don't, you're obligated to report them to the Better Business Bureau, local or state financial regulation board, and the CFSA (if the lender is a member.)
One of the worst solutions you could use would be to roll your loan over and suffer through expensive service fees... which are great for the lender. Unfortunately, they can put you in a prolonged payment cycle, where you're constantly surrendering part of your paycheck to the payday loan company to cover the extra fees. Before the payday loan industry was regulated, many people lost their shirt, due to interest and service fees (as a result of defaulting on their loans.)
Your lender may have one, or several extended payment plans to offer. In most cases, the lender will allow up to four additional smaller payments, to help you to get caught up on your debt. Make sure to explore all your options before making a decision. There are several links located at the bottom of this page that offer advice and options that you need to know about before you decide what payday loan extended payment plan is right for you.