What does it mean to pay off a payday loan?
Paying off a payday loan means you pay it back to your creditor. You can either repay a loan by repaying it in the normal way, but you can also repay a loan by extraordinarily repaying the loan ahead of time. In this blog post we will take a closer look at the different types of loan repayments, and in the end we will also give you good advice if you have a loan that you would like to pay off.
Different types of redemption
Generally, you can redeem a loan in three different ways, and if you investigate the options for repaying a loan, you will generally be presented with these three options. Below you can read more about these three ways to help you find the one that suits you best.
In the case of ordinary repayment of a payday loan, it is a loan that is repaid within the agreed time. In other words, this is a loan where you pay the installments every month.
When you take out a loan, you will be presented with a specific maturity. At regular repayment, your loan will be repaid when the maturity is over. You can affect the maturity yourself by either choosing larger or smaller repayments when applying for your payday loan. You will reach an ordinary redemption sooner if you choose to pay larger installments each month.
Extraordinary settlement upon settlement
This is an extraordinary redemption if you pay back a loan ahead of time. Extraordinary repayments are often made in connection with the sale of a home where a mortgage is attached. This loan must be repaid when the home is sold, and this can typically be done without problems if the value of the home exceeds the loan amount.
You can also make an extraordinary settlement by settling on certain consumer loans if it is part of the loan agreement. With smaller consumer loans, this can be an option if you suddenly get unexpected money – for example if you get money back in tax.
With some loans, you have to pay a certain rate in order to be allowed to make an extraordinary settlement upon settlement. For example, the loan may be repaid at 105, which means that you have to pay 105 kroner to reduce the loan amount by 100 kroner.
Exceptional repayment upon conversion
You can also make an extraordinary repayment of a loan if you reschedule the loan. For example, you may have found a loan with a better interest rate, which is why you choose to take out a new loan so that you can pay off your old loan.
There may also be an extraordinary repayment upon rescheduling if you have several small loans that you would like to collect for one large loan.
Having trouble repaying a payday loan?
It is not unusual for you to have trouble repaying a loan because, for example, you cannot afford to pay down the repayments. If you have ended up in this situation, it is incredibly important that you contact your creditor so that you can find a solution together. The worst thing you can do is ignore the problem as it will simply grow bigger. Many creditors are easy to talk to, so you are likely to find a solution together.