Failure to pay back a loan settlement usually attracts some consequences.
But still, a payday loan should never be considered a debt trap!
Most individuals tend to look at online payday loans the wrong way, commonly attributing it to one of the easiest ways to destabilize your monthly earnings. This should never be the case, as online payday loans are only here to help.
For instance, let’s say you live monthly on a salary of $1,500, but in a specific month, there comes the need to, let’s say, work on your home improvement; and after doing all your calculations, you find out that the entire expense would cost you just about $750.
Now, deducting $750 from an already planned budget for the $1,500 salary that just came in might leave you totally handicapped for the month.
You can easily take up funding in the form of a payday loan to cover your home improvement and still have enough funds on your hand to last you till the end of the month. The only thing this would cost you is that the loan settlement would have to reflect in your next paycheck, but all these can be done easily in the following ways.
Can a Payday Loan Garnish Your Wages?
The simple truth here is that an online payday loan can only garnish your monthly wages if you let it.
Most individuals that have been known to live extravagantly can attest to this.
As discussed earlier, online payday loan direct lenders are only there to help. An online payday loan direct lender only has the right to garnish your wages if they have a court order that results from a lawsuit against you (the borrower). But still, no payday lender has the right to garnish your wages if you are faithful in your monthly loan settlement.
Wage garnishment occurs whenever you default on your loan settlement and your online payday loan direct lender is forced to issue a lawsuit against you, which in turn gives them a court order against you to your employer, telling them to withhold a certain portion of your wages for the payment of your loan debt.
Still, the moment you start developing certain borrowing habits that are harmful to your finances, it will definitely reflect in your monthly wages.
Such of these bad habits might include:
- Borrowing money without a well-planned budget
Borrowing money without proper planning and budgeting can lead you to debt.
A budget gives you a better insight into the current prices of goods and services for your pending purchase, so let’s say, for example, you are the one that’s looking to take up funding to help with your home improvement.
Now, suppose you just rush to the market after getting your payday funding without doing proper research on the market and how much it’d cost you in total to manage your home improvement. In that case, you’ll find yourself spending more than what you actually expected.
There are so many beautiful things lurking in the market to take your money, and without proper planning and budgeting on your online payday loan funds, you’ll find yourself spending even more than you took up in funds from your direct payday lender.
So you see, the fault doesn’t come from your online payday lender, but you!
Most individuals, too, in a way to live to the expectation of their peers, go ahead to adopt a lifestyle that is way above their monthly paycheck and standard of living. This will, in turn, reflect negatively on your ability to pay back your loan debt when due.
Bad habits like gambling and alcoholism also play a negative role in your ability to pay back your loan debt whenever it’s due.
Finally, most consumers find themselves in a bad position with their lenders by waiting too long to pay back their loan debt. Most times, the funds might just be there, but they are just too lazy to go and make the payment.
How to Prevent Wage Garnishment from an Online Payday Loan Direct Lender
A payday loan is not a gift; it should never be confused as a form of free fund or grant.
Thus, the key to preventing loan garnishment from an online payday loan direct lender is by paying up your loan settlement whenever it is due.
This might not be so easy to do, but there are ways you can actually use to make it work.
The first thing you will need to do is find the best way to deal with your bad habits. Bad habits in your life will make it really difficult for you to manage your loan offer to suit its exact purpose effectively.
The next big step you have to take is to ensure that you draft out a feasible budget for your received loan offer. This will help you know the exact amount you should take up in funding and the exact time that’d be most convenient for you to pay back on the offer.
A good budget will also help you plan your other monthly expenses until your next paycheck.
Also, procrastinating on a loan payment will only make things worst for you. Delayed loan payments usually come with accrued interests and fees, which might prove even more challenging to pay back.
Good knowledge of how to calculate the interest rate on your payday loan offer also goes a long way in helping you determine how to schedule your monthly payments.
Payday loan interest rates vary, but mainly amongst lenders. These rates also depend on the total amount of money you are requesting in payday funding and the entire terms of your loan offer.
Defaulting on your loan settlement, you agree to the terms that you are liable to pay back all accrued interests and fees on that loan offer. Therefore, we advise that you first consider the online payday loan direct lender you’d be working with prior to getting the loan offer.
Finally, communication is key to every relationship.
Should in case you find yourself in a tight spot in your finances, feel free to communicate it with your direct payday lender to see how the both of you can come up with a more feasible payment plan on your loan offer.