How do I repay a payday loan?

Answer: In order to repay a payday loan, you often must either provide a personal check to the lender or an ACH authorization to electronically withdraw money from your checking account.

 You may be required to come back to the store to repay your loan. If you do not return, your lender might repay itself by presenting your check to your bank or credit union or withdrawing funds electronically from your account.

If you have taken out a loan online, you provide an ACH authorization for the lender to electronically access your checking account for repayment on the loan due date. So, while the way you repay a loan may depend on whether you took out a loan in a storefront or online, in general, you provide the lender a way to repay itself the full amount as part of the application process. This is done either by:

  • Giving the lender permission to electronically take the money out of your checking account when the loan is due, through an ACH authorization
  • Giving the lender a check for the repayment amount that they can deposit when the loan is due


Know how your ACH payment is set up. If you gave a payday lender permission to take money directly from your checking account, it is important to know exactly how much your lender will withdraw and when.

Some lenders might set up payments assuming you only want to pay a renewal fee on the loan’s due date and require you to take action several days before your loan comes due to pay it in full. This could result in you paying several rounds of renewal fees while still owing the entire original loan amount.

Make sure you understand how your loan will be repaid and how much the loan could ultimately cost you before agreeing to use this form of credit.

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