Millions of people take out payday loans each year to help them cover unexpected expenses or help get them through until the next paycheck clears. These loans are typically repaid with interest on the next payday manually. However, many lenders are switching to automatic payments instead, which can get problematic.

How to Stop Automatic Payday Loan

In this article, we will show you how to stop automatic payday loan withdrawals.

The simplest method to stop automatic withdrawals: Contact your lender directly

The first step is to contact your lender and ask them to stop the automatic payments. Sometimes lenders will be willing to do this; other times, you may need to go through a dispute process.

If your lender refuses to stop the payments, you may need to consider getting a new payday loan or using a personal loan to get out from under the payday lender. There are many reputable lenders out there.

So don’t be scared to look for one specializing in helping people with financial problems and use a personal loan EMI calculator to understand how much you can comfortably borrow.

Once you have contacted your lender, it is essential to keep up the communication. Make sure you keep an eye on your bank account and credit score to know if there has been any negative impact from the automatic payments.

If everything goes according to plan, you should stop sending automatic payments within a few weeks.

What if the automatic withdrawals don’t stop?

If the lender doesn’t stop making automatic withdrawals when they agreed to stop, you may need to contact your bank and have them freeze your account or stop the payment. You’ll most likely need proof that the lender is not following through with their promise to stop the payments.

The bank may also recommend opening a new account and closing your old one, though this is typically a drastic step that can have a ripple effect across your finances.

If you need to shut down your old account and open a new one, remember to update your other bill payments or direct deposits to the new account and destroy your old debit card so that you don’t accidentally use the wrong account.

If you make any further transactions on a closed account, it could result in having the account re-opened or have overdraft fees triggered, resulting in further financial problems.

If you can’t get the automatic withdrawals stopped on your own with the bank, you may want to consider filing a complaint with your state consumer protection agency. You can also contact the Better Business Bureau and file a complaint.

The bottom line

For the most part, changing your payment arrangements shouldn’t be difficult to do if you contact the lender directly. However, if the lender won’t stop making automatic withdrawals, you may need to take some steps to get them to stop.

Stay diligent and keep records of any conversations you have with the lender to make sure that they are following through with their promises.