Most of us have been there in our time, especially with the borrow now pay later mentality of recent years and the until recently ready availability of credit.

You had a few bad days, its the middle of summer and the air conditioning broke, some guy reversed into your car took out the headlight and didn’t leave an ‘it was me note’ on top of that the money for the school trip you promised your kid suddenly had to be paid. So what did you do, you went on the Internet found one of those payday loans, filled in the form and asked for a bit extra just in case.

It was a breeze and the money went into your account the next day. Problem is the repayment date is looming and you realise you may have overdone it a bit and there is not way you can meet that whole repayment.

So what do you do, well the first thing is you don’t stick your head in the sand and hope that it goes away. You need to let your lender know as soon as possible and see if they can offer you some flexible repayment options, most companies do as long as you are honest and let them know before the due date.

The flexible options usually come in one of two forms, they either let you pay a part of the loan and the finance charge (interest), then roll over the remainder for another agreed period. Or they might agree that you pay off the finance charge and roll over the original loan for a further extended period. Lenders have different repayment choices but they will let you know what system they operate if you speak to them.

Of course if you have done your homework and asked these questions before taking out the loan, you will already know your options and what interest rate they are charging you, because if you don’t do your homework and take a more expensive loan as a consequence you could find yourself seriously out of pocket.

Confucius say ‘do your homework’ because if you are in a position where you need to take out a loan like this in the first place, you certainly can’t afford to be paying the higher rates of interest which can sometimes be as much as 30% of the original loan in charges. Believe me it is worth spending a bit of time researching what companies offer the best rates and terms, might just be the difference between you managing the loan and not managing the loan.

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