When you take out a payday loan, you agree to allow the lender to withdraw money from your bank account for repayment. Generally, the total loan amount and any associated fees are due in full within 14 days or at the time of your next paycheck. If you don't have the funds to pay off the loan in full by the agreed-upon date, lenders may allow you to continue with the loan. However, this will come with additional fees.
It's easy for borrowers to get stuck in a payday loan cycle, taking out loans to pay bills only to find themselves unable to pay other bills when their next paycheck arrives. In Massachusetts, payday loans are illegal due to the high interest rates charged by lenders. The state government has put regulations in place that prevent traditional lenders from operating within the state. If you can't pay off your payday loan within the specified time frame, lenders are likely to turn to a third-party debt collection agency.
It may seem like a payday loan is your only option when faced with an emergency bill or debt, but it will end up costing you more than the problem you are trying to solve.
