How to Convert a Payday Loan Into an Installment Loan
When those financial bumps in the road pop up, a payday advance can be a great help. But what happens when that payday advance turns out to be more than you can afford to comfortably pay back? There are options out there in which you can amend your original loan and convert it into a more manageable four payments. To be eligible to turn your payday advance into an installment loan, there are certain steps you must legally take.
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Instructions
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Contact your payday lender to find out if it is a member of the Community Financial Services Association of America (CFSA). If not, ask about specific regulations on installment loans and make sure you are eligible for conversion.
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Go to your payday lender on or before your due date and inform the representative that you wish to change your payday loan into an installment loan . You are not eligible for signing up for a payment plan, though, if you are even a day late.
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Sign a new agreement, amending the original contract. This will break your balance into four equal payments.
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Bring in the payment on or before each due date. You cannot be late during the payment plan, or else you are in default of the agreement.
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After you are completely paid off, make sure to ask what your payday lender's and state's regulations are concerning how many times per year you can convert your payday advance into an installment loan. This can be helpful to know in case you need to take out another installment loan in the future.
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Tips & Warnings
When obtaining payday advances, never advance more than you can easily repay. Research your state's specific payday advance laws.
If your payday lender has a CFSA seal posted in the location and you meet the requirements, yet they refuse to allow you to sign up for the installment loan, they are breaking CFSA standards. You have the right to report them to CFSA and the company's corporate office.
