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For those who are beginning to struggle paying off their debt or experiencing a change of circumstance that makes their current repayment program impossible, an Arrangement to Pay could be the perfect answer. 

An Arrangement to Pay is an agreement between you and your lender to restructure the terms of your loan. For those who are struggling to pay off their debt, lenders will usually be happy to alter the terms of your loan to make it easier for you to pay. This will usually involve paying off a smaller chunk month for a longer time period. Struggling with your finances is always stressful, but an Arrangement to Pay could help you get back in control and start tackling your debt. 

How do I get an Arrangement to Pay?

The only way to request an Arrangement to Pay is to get in contact with your lender. You will need to clearly explain your current situation to them and request that they make an alteration to the manner in which you repay your loan. This is an Arrangement to Pay. It might be that you are unable to repay the money you owe over the few months you have left, but if you had a year to pay it off in smaller chunks you could do it. Your lender will often be happy to support you in paying off your loan in a way that works for you. Remember that lenders spend money and time chasing loans that have been defaulted on and would often rather customers pay it back in a way that works for them.

Are there downsides to an Arrangement to Pay?

An arrangement to Pay will be visible to future lenders and could affect your credit score negatively. However, it is one of the least damaging negative data to appear on your credit report. This is because it shows that you, the borrower, have properly assessed the situation and attempted to reach an agreement with your lender.  It is certainly the superior choice between an Arrangement to Pay and defaulting on your loan.

Why might I need an Arrangement to Pay?

If you are currently having trouble paying off your payday loan or beginning to fall behind with repayments, you might be in need of an Arrangement to Pay. This might be because you have lost a job or are becoming overwhelmed by your debt. 

For example, if you’re currently paying off your debt in $500 a month chunks and are struggling to keep up with repayment, your lender might be willing to accept $300 a month chunks and have you pay off your debt over a longer time period. You do need to be careful when considering an arrangement to pay and make sure that you’ve taken into account the amount of interest you will build up within the terms of your new loan.

Man opens empty wallet, no moneyWhat are my other options?

There are always options when it comes to repaying your debt. If you are ever concerned about what the right choice is for you, get in contact with a debt or financial advisor. A trained professional will be able to assess your specific circumstances and advise you on the best path towards being debt-free. You can also seek free impartial advice on organising your debt from the Consumer Finance Protection Bureau online or by calling (855) 411-CFPB (2372), as well as report any issues to your state’s attorney general. Many charities have credit consellors so if you are in need and cannot pay you may still be able to seek free help with your debt.

Man covered in post-it notes, stress

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