by Ben Sweiry ·
Modified on 20 September, 2022
Yes, you can make a partial payment on your payday loan, but this will almost certainly come with repercussions.
Partial payments will help to lower your owed balance, but you may still end up with late payment fees and you may take a hit to your credit.
In most cases, partial payments can be made towards your payday loan balance, but you will need to get specific consent for this from your lender, so it is worth calling them before taking this route.
What is a Partial Payment?
A partial payment is essentially where you agree to pay a part of your outstanding debt as opposed to the full total. Partial payment for payday loans is a course of action usually taken when a borrower cannot afford to make their payments on time and in full.
A borrower might feel that even if they won’t be able to pay back their owed amount in full, a partial payment will provide proactive communication with a lender and they may be understanding of your case and be happy for you to set a date to pay-off the remaining fees with little-to-no penalty.
Partial payment, however, will more often that not result in a late payment penalty and can negatively affect your credit score. Having said that, the partial amount you were able to pay-off will be subtracted from your overall amount owed.
How To Make a Partial Payment?
If you find yourself in a position where you won’t be able to make your repayments for your payday loan on time and in full, and therefore are electing to repay a figure less than the amount owed, there are several steps you should take:
Contact your lender.
The first thing to do is to call your lender and ask them if they will accept a partial payment. If you are in the position where you have a good relationship with your lender, they may be understanding and accept your proposal without incurring any late fees. They may let you skip a payment, or to change the due date.
You should make sure to ask if the payment you’re considering will be reported as late. You can also find out whether your lender has any ‘special circumstances’ consideration plans if your situation is particularly difficult.
Make arrangements to pay your shortfall.
Whilst a lender may be understanding of your situation and permit you to partially pay-off your debt at first, if you don’t catch up with your repayments, it’s very likely that you’ll be reported late every month that the deficiency lingers.
This can result in a negative impact on your credit and late fees being incurred to the point where it becomes unaffordable.
Therefore, making arrangements to pay, whether it’s borrowing money from a friend or family member, getting a second job or a side-hustle to earn some extra cash, is imperative.
Consider debt management options.
Being realistic, if your hardship is not temporary and you find yourself in a spiral of debt, partial payments are not going to be the solution to your issue. The best course of action in this case is to explore debt relief and debt management options.
Does Partial Payment Affect Credit?
Yes, partial payments could have a negative impact on your credit score. This is because your lender may mark the payment as missed or delinquent on your report if you don’t at least make the minimum payment on time.
A late payment stays on your credit report for up to 7 and a half years after the account is first reported late.
What If I Cannot Pay Back My Payday Loan?
If you find yourself struggling to pay back a payday loan, the best thing for you to do is to face the problem head-on. There are steps you can take to sort out the solution – you don’t need to panic.
Step One: Contact your Lender
This is a vital first step as, by law, your payday lender must help you out if they are contacted. They are required to direct you to sources of free debt advice, suspend recovery of the debt if you are figuring out a debt repayment plan on your own and treat you fairly, which means giving you a reasonable amount of time to repay the loan.
Step Two: Speak to a Trusted Friend or Family Member
Your nearest and dearest are the best people to talk to about your issues. They will be understanding and provide you with the support you need at this stressful time.
You could also approach friends or family for some money to help you in the short term, before you get back on your feet. While this may seem stressful, family and friend loans won’t negatively impact your credit score in the way that missing loan repayments will.
Step Three: Get Help From a Debt Advisor
The best place you can get advice if you’re struggling to manage your debts is from a free debt advisor. These charity advisors are there to be on your side and to negotiate with your lender on your behalf.
You must tell your lender you are working with a debt advisor and they then must give you a reasonable amount of time for you to make a repayment plan.
They cannot immediately go to debt collectors, and they must not continue to contact you whilst you are working with your debt advisor. If they do, ask them to stop.