Payday loans are not identical to other types of short term loans. While payday loans are a type of short term loans, there is only one repayment term. Most payday loans will need you to repay the entire loan and the interest in one month. Should you fail to repay the loan and the interest, there can be an extension provided to you. This may be seen as a renewal by many. Although it is a renewal of sorts, that is not the financial or technical jargon you can use in this scenario. Renewal applies to short term loans wherein the repayment period is a few months. In such cases, the repayment term can be renewed for another period, which would be the same as that of the original. The renewal term may be different but it would not necessarily be a month.
In case of payday loans, when you do get an extension after failing to repay the loan and the interest, it may or may not be for a month. The extension you get could be shorter than a month. It is rarely longer than a month, unless your original term was of a few months. You could get an extension period of seven days. It could be ten days or a fortnight. This depends entirely on the lender. All lenders of unsecured short term loans including payday loans would reserve this right and they would use their discretion to determine how long or a short an extension would be. This is effectively a grace period and a lender is not obligated to provide such extensions. However, they would have to do so since a borrower will need time to repay after missing out on the initial deadline.
It is always better for borrowers to speak about renewals with lenders if they are unsure of being able to repay the loan within the specified term. It is another matter that borrowers should always go for a repayment term that would work for them. It is futile to opt for payday loans when you are certain that a month is not enough for you to repay the entire amount with interest. You can opt for a smaller loan amount. You can ask for a longer repayment. Both may work in a practical scenario. When you apply for payday loans through Flex Repay in UK, you will get many types of lenders and various quotes. Some lenders would be willing to offer a repayment period longer than a month. Some would offer amortized payday loans in which case you get to pay equated installments every month or fortnight, depending on your terms as influenced by your payday.
Renewal will apply invariably when you fail to repay a loan. Whether this will be simply an extension for a few days or an actual renewal of the original repayment term will depend on the lender and would definitely be influenced by how you deal with the loan officer or the manager handling your account. There are some lenders of short term loans that would be willing to renew the term of your payday loans by a month, if that was the original repayment period. You may have some lenders that would extend the repayment period by longer than a month. This is generally applicable only in cases where the loan amount is huge for payday loans and the repayment period is a few months. It is unlikely for any borrower to get an extension for two months when the original repayment term was a month.
Discussing renewals and the terms that may apply or trying to find out about the policy of lenders pertaining to this matter can be a tricky exercise. As a borrower, you don’t want to give out an impression that you may ask for a renewal or extension by the end of the original term. Lenders may be a little skeptic to offer you money if they think you intend to miss your due date or that you would not be able to repay the entire loan amount with interest by the end of the stipulated term. You may read more about a particular lender or consult with other borrowers. Try to be as aware as you can about the policies of a lender pertaining to renewal of payday loans.