When borrowers cannot repay a short-term advance on its initial due date, rolling over the balance triggers exponential fee accumulation without reducing the principal balance.
1. The Exponential Cost of Loan Rollovers
Rollover Fee Accumulation: Rolling over a $500 advance every two weeks with a $75 fee costs $975 in finance charges over six months while the original $500 principal remains owed.
Extended Payment Plans (EPPs): In many states, Community Financial Services Association (CFSA) members must offer statutory EPPs that freeze additional fees and spread principal over 4 to 6 equal installments.
Nonprofit Credit Counseling: Certified NFCC counselors negotiate debt management plans that waive penalties and consolidate high-interest debts.
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