What to know about stopping a check on a payday loan

                                                                                         

Before stopping a check you must first know that stopping payment on the check used to get a loan does not cancel the contract to repay the loan. If you are thinking about asking your bank to stop payment on the check used to get a payday loan (something you might do to stop multiple NSF fees from adding up while you try to work out a repayment arrangement), here are some things to consider. The first move you must make so as to stop a check from being processed is to notify the bank before the due date for the loan if you want the bank not to pay the check when it is presented. You can tell your bank orally to stop payment but that only lasts for fourteen calendar days. You must follow up with a written notice. The second move would be to provide the bank with all the information it needs. To stop payment, the bank needs to know the number of the check, the date it was written, the payee's name, and the exact dollar amount. The bank fees on this transaction will range from eighteen dollars to thirty two dollars, similar to a bounced check fee. The stop payment order typically lasts only six months. At that point, the check can be represented to the bank and will go through or you will have to pay another stop payment fee. Carefully examine your bank statement for old checks that are processed and ask your bank to restore the funds and return the check as stale dated, if it is over six months old. You must know that some state payday loan laws place borrowers at legal risk if they stop payment on the check used to get the loan or close the bank account or both, regardless of the reason.

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