How Payday Loan Companies Penalize Late Payments
Payday loan companies will penalize you if you make a payment late.
Payday Loan Companies Late Fees
How much your late charge will be depends on the size of your payday loan. The late fee is calculated on the amount of money outstanding. There will be an interest fee, late fee, and there may be additional fees added to the outstanding balance giving you a new total due.
Each time you are late the payday loan amount due will be recalculated. Let’s say your original loan was for $400 and it was for 14 days. The cost was $15 per $100 for a total of $60. That means you would owe $460 when your loan is due. However, when your loan is due you are late making the payment by 2 days, which means you now owe the late fee of $60. Total owing is now $520.
Payday Loan Companies Roll Over
In most cases when a payday loan payment cannot be made on time it is rolled over. A roll over involves taking the payday loan due and rolling it over for an additional period of time. The will incur the initial interest, a late fee, and then the new interest. Let’s use our previous example:
Original loan was $400, the original interest on the 1st payday loan was $60 plus the late fee of $60 we were left owing $520 and now you’ll have the new interest on the $400 which will again be $60. You now owe $580. That’s a total of $180 on a $400 payday loan.