Can I flip a payday loan from one payday lender to another?

Sure. But maybe you want to think that over.

The commonly understood definition of "loan flipping" pertains to a questionable practice often found with home mortgages:

"The lender encourages a borrower to get additional cash by refinancing the borrower's mortgage again and again. This tactic significantly increases the borrower's debt because fees are tacked on to each loan transaction, and the borrower may pay a higher interest rate than with his or her original loan."

In the context of payday loans, "flipping" pertains to a similar practice--the payday lender agrees to a borrower's request to "roll over" the payday loan. This "roll over" is "financed" with fees paid by the borrower. Depending on State regulations, the number of times a payday loan can be "flipped" or "rolled over" with one payday lender varies--or is not permitted. Many online payday lenders rely on loan rollovers to make money in fees.

The original question of "flipping" a payday loan from one lender to another is different altogether.

To "flip" a payday loan from one lender to another a borrower would: (1) qualify for a new payday loan, (2) get the money, and then (3) pay off an existing payday loan. The borrower would still owe money--but now to a new lender.

A borrower may choose to "flip" his or her payday loan from one company to another because he or she cannot pay off the loan. He or she may be unable to roll over the payday loan with the original lender. Or, he or she may have rolled the loan over many times and the lender is now requesting full repayment of the original payday loan.

So, to answer the original question: Sure, you can flip a payday loan from one lender to another--like you can use one credit card to pay off another credit card. However, this is an expensive solution. If you are making choices like this--taking a new payday loan to pay off an existing payday loan--it is probably a sign that you should actively consider and seek credit counseling.

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