Avoid payday loan default with an extended payment plan

A black-and-white photo of a key in a door lock.

An extended payment plan can be the key to avoiding payday loan default. (Photo Credit: CC BY/MoneyBlogNewz/Flickr)

Despite planning and the best of intentions, sometimes people find themselves unable to repay their payday loans when they come due. That’s why payday lenders that are members of the Community Financial Services Association of America (CFSA) offer an Extended Payment Plan (EPP). These types of installment loans enable consumers to repay their loans over a period of additional weeks regardless of the reason for default and free of additional charges.

EPP provisions vary by state and lender

Depending upon the state in which payday loans originate and whether the lender is a CFSA member, the stipulations of an Extended Payment Plan will vary. In the event that the laws of that state already provide for an EPP for consumers who get behind on their payday loans, state laws take precedence. CFSA members offer the service as an aid to consumers in states where a specific law does not already exist. CFSA-member extended payment plans generally allow consumers to repay their installment loans in four equal payments over the next four paydays, says eHow Money. If a borrower misses one of the four EPP payments, additional fees may get started.

How to request an EPP from CFSA-member lenders

  • Make sure the lender is a CFSA member. The CFSA’s blue oval logo should be on display in the payday lender’s office or on the website. Even if the lender is not a CFSA member, it may offer its own extended payment plan. Ask for details.
  • Contact the lender before close of business on the due date. If you’re going to run into trouble repaying your payday loans, contact your lender before close of business on the day before your loan is due. Go to the lending office or contact the lender online. Ask for an extended payment plan. You’ll then need to sign an agreement form that will specify the additional due dates. Read the extended payment plan carefully before signing.

If the lender is a CFSA member and you haven’t used an EPP in the past 12 months, but the lender refuses to offer you an EPP to help you avoid default, you can file a complaint. Contact the CFSA during Eastern time business hours at 888-572-9329 (fax 703-684-1219) or cfsa@multistate.com. Alternatively, contact the CFSA by mail at 515 King St., Suite 300, Alexandria, Va., 22314.


CFSA Consumer Complaint Form

CFSA: What is an Extended Payment Plan?

eHow Money