Direct payday lenders online automatically debit a borrower’s account on a specified due date. Most lenders will abide by the terms and agreements and make a one-time debit on that set day. There are some predatory lenders with poor practices that make repeated automatic debits and cause many problems.
Automatic payments seem to be an easy way to never miss a payment. Many utility accounts are started with this feature as an option to omit having to place a down payment due to poor credit. Every month, the money is taken directly from the bank account on file around a certain date. Short-term loan lenders use the automated feature and best direct payday lenders will call and remind the borrower of the upcoming transaction.
Why would direct payday lenders make reminder payment calls?
Reminding a customer that an upcoming payment is going to occur is a clear sign that the business is a responsible lender. Not everyone has a great memory for bills and their due dates. We get caught up in our week and all the things which must be done and the next thing you know, the money has been drafted from the account. Let’s hope there is money in the account, or the electricity bill just got more expensive.
Overdraft fees are one of the charges which result from no money in the account on the due day. Most often, this fee averages $35. There is also another charge by the merchant trying to collect the payment. These fees are most often described as NSF or Non-Sufficient Funds. These fees average about $35 as well. Not paying attention to how much money is in the bank and what date it is just cost someone about $70 in fees. Ouch.
Those predatory lenders I mentioned above take full advantage of account access at this point. Most merchants collect the fees or add them to the bill to be rescheduled and the customer will be notified of the new date. Some of these “bad” lenders have been known to repeat the collection attempts which of course, repeats the amount that they and the bank can collect in fees. There is one major bank, JP Morgan Chase, which has started to make changes in order to protect customers form the repeated withdrawal transactions.
When you look for direct payday lenders, ask about their collections policies to make sure you are dealing with one that will attempt to collect only one time before notifying the customer. While you have them on the phone, ask if they make reminder calls. With a friendly reminder a person will have time to make a transfer or obtain the money elsewhere in order to cover the up coming automatic payment costs. A person that has many different automatic payments scheduled will want to keep a close eye on their daily balance throughout the month.
On a good note, the automatic payment from any short-term lender is only about two weeks away. It is not as easy to forget that the upcoming draft will be made on your account. When you work with responsible direct payday lenders online you will have a reminder, a one time draft attempt and fees which fall into the lower than average range.