Yes – you can cancel a payday loan at any point but you might be charged interest for the days that your loan stayed open.
When you read the terms and conditions of a payday loan agreement you will find out that you can cancel your loan at any point. It might be the same day that you took out the loan or maybe even 7 days or two weeks after you take it out.
If you want to cancel your payday loan agreement you will usually need to write or call the lender and also pay off your loan in full. You will also need to pay off the interest that was accrued up to that point.
Depending on which lender you work with you might also have a cooling-off period. This is where you have 24 or 48 hours to cancel the loan without having any penalties or interest accrued. If this is something you want to do it might be best to check the terms and conditions first before applying.
- It is possible to cancel a payday loan at any point but you might have to pay interest for the number of days that have passed since you took out the loan.
- You cancel your loan and then pay it off in full.
- If you get in touch with your bank you can ask them to cancel payments to the online payday lender but you will still need to speak to your payday lender and cancel the loan otherwise you’ll still be liable to pay interest accrued.
- Some lenders offer a cooling-off period of up to 48 hours and this means there are no fees if you cancel within this time period.
How Can I Cancel My Payday Loan?
Step 1 – Get in touch with your payday lender by emailing, calling, or writing to them. When you register for your loan you’ll get their contact details from their website. They will let you know how to get in touch with them. You might also be able to log in to an account section of their website to make payment in full.
Step 2 – If you have had the loan for a couple of days already you might be liable to pay off any interest that has been building up. Payday loans accrue daily interest so this might have built up. If you’ve had the loan open for 3 days you’ll need to pay 3 days’ worth of interest for the loan to cancel it.
Step 3 – Once you have spoken to your lender and paid it off you will receive a notice from your lender that it has been canceled and you don’t owe any further money to the company.
Why Would I Want to Cancel a Payday Loan?
You Have Found Money Somewhere Else
If you’re looking for fast cash then you might have made multiple applications on the same day. This sometimes results in multiple loans being funded at the same time. If you’re only looking for one loan then you might want to give back the money from the other loans. Alternatively, you might have found the money somewhere else – from family and friends for example which means you wouldn’t need the payday loan in the end.
You Want To Repay Your Debt Early
Payday loans are typically used at the end of the month to make up for a shortfall in cash before your next payday. Alternatively, they are used as loans to pay for emergency expenses or bills like a medical bills or to fix a roof. If you have then paid off this money you might find that you no longer need the loan and want to repay it. You will be able to save on the daily interest by paying the loan back early.
You’re Unable To Afford It
Payday loans are considered a very expensive type of financing because they are funded quickly and used to pay for things on a short-term basis. You might find that the daily interest is adding up too quickly and you want to pay it off with a lower interest form of debt so that the interest does not keep accruing and put you under financial stress.
Can A Lender Still Charge Me 1,2 or 5 Days After I Cancel?
Yes – a lender is able to charge interest even if you want to cancel your payday loan after a couple of days. For a typical loan, interest will begin to accrue as soon as your loan is approved and funded. Interest will start to accrue each day at a typical rate of 1%.
Some lenders do offer a cooling-off time period of 24-48 hours. During this time period, you can cancel or return your loan without any penalties or interest accrued. Make sure to check your terms and conditions to see if your lender offers this.
Lenders make money by charging you interest so it is not unfair for them to charge you even if it’s just for a few days. The lender will have to spend some money when they underwrite and credit check your process and this costs them cash. Even a small payment of interest after a few days will help them recoup some of the money that they spent.
Will My Credit Score Be Impacted if I Cancel My Payday Loan?
If you repay or clear your loan in full and there are no arrears or payments overdue then your credit score will not be impacted.
Can My Bank Cancel My Payday Loan?
Yes, your bank can cancel payments to your payday lender but you’ll also need to pay off your loan in full and let your lender know that you want to cancel or close your account. If you don’t cancel your account then interest will still be accrued.
How Can I Get My Bank To Stop Making Payments to a Payday Lender?
Yes, you can get your bank to stop making payments to a payday lender if you get in touch with them and can cancel your automatic repayments. When you first apply for your loan there is a process called ACH. The ACH authorization gives the payday lender the ability to take payments from your account each month. You can email your bank to tell them to stop these payments but if you don’t tell your payday lender then you will still need to make your outstanding repayments and interest might keep accruing.