How do you cancel a payday loan? How is it done? Surely you ask yourself this question if you are about to request one. But, as you imagine, if you finally do not need the money or have already recovered it, you can go back and cancel it. Of course, it is important that you know how to do it.
How to cancel a payday loan
First of all, what does it mean to cancel a payday loan? It means terminating a contract by returning the money that the financial institution has lent along with the interests associated with the operation.
A cancellation of a payday loan can be made at any time. What reasons lead us to do it? These are the main ones:
Reasons to cancel a loan
- The financial product is no longer interesting for the user
- The user has found another payday loan that fits more
- Money is already available and canceled to save interest
- All debts are canceled to join them in a single loan and thus pay a single monthly fee
These are some of the main reasons that lead many users to cancel loans that are still within the deadline.
How do you cancel a payday loan?
One of the best options is opting for full early repayment. If you already have the payday loan contracted, it is best to return the money that is pending in a single payment. The earlier it is returned, the lower the interest payable. So if this is your case, it is the option that suits you best.
At higher interest rates, some entities may charge commissions for this operation. A commission that at the time will be greater than 1% of the capital if there are more than 12 months left before the end of the term, nor more than 0.5% if the term is less than 1 year.
However, early repayment is not the only option. You can also opt for the right of withdrawal of a credit.
Right of withdrawal of a credit: what is it?
That is, subject to this law, any user can cancel the loan requested. But yes, within 14 calendar days from the form of the contract. It exists in case the user regrets at any time of the contracted product and decides to go back. In these cases, that possibility exists.
This cancellation, being a ‘right of withdrawal of a credit’ say that it has no commission or additional cost. Only the requested money and the interest generated up to that day should be paid.
Therefore, to cancel a payday loan based on the ‘right of withdrawal of a loan’, it should be communicated in this way to the financial entity in which said loan has been requested.