Massachusetts payday loans have a specific financial arrangement. In some circumstances, there could be some variations made to the arrangement. With any loan, the borrower must not enter into the arrangement quickly or without thought. Require the loan officer or the individual taking the application and processing it to sit down and explain it until there are absolutely no questions left.
The financial arrangement has three parts – the loan, the interest and fees charged and the repayment process. If any part of this process is not explained to the borrower, the chances of the relationship falling apart are higher.
The loan is often referred to as the principal amount. It is the amount the borrower requested on his application. The principal amount may be less than the borrower requested because his paycheck is less or for some other extenuating circumstances. Whatever the principal loan amount, that is exactly the amount that has to be paid back. In most cases, that is typically the next time the borrower gets paid from an employer.
Also, the interest and fees on the Massachusetts payday loans will have to be repaid, but that is discussed in the next section.
The Interest and Fees Charged
When there is a dispute about paying back the payday loan, it is never about the principal loan amount. The borrower clearly understands this is the amount borrowed and the amount to be paid back.
The problems arise when the borrower does not understand the amount of the interest and fees and how the fees are charged on the Massachusetts payday loans for the use of the money over a period of a few days. When speaking with the loan officer initially, it is vitally important that the borrower ask for a clear explanation of how the interest is added and how the fees are charged, particularly if the borrower is unable to repay the entire amount on the following payday.
The repayment of the Massachusetts payday loans is when borrowers may get in trouble. If the borrower needs $300 as a loan, he can write out a postdated check to the lender for $300 plus the financing fee for using the money to be deposited on the date of the employee’s next pay check. When the 14 days have passed, the borrower will write another check to include the additional finance fees. In other situations, the money may be automatically deducted from the bank account instead.