Do I Really Have To Pay Back My Payday Loan?
Since payday loans are considered unsecured loans, they are not secured with any collateral or personal property, I know there are some people out there who think there aren’t really any consequences for failing to pay them back. But when you’ve got a payday loan due, it’s always in your best interest to get it paid off as soon as you can. I can’t stress it enough that you should do everything you can to get the loan paid off right away, because waiting will only make matters worse. At the very least, failing to pay back a payday loan by the due date will result in having to borrow another loan to cover it. Now you owe even more money and even more interest, which builds up quicker than most people realize. When people get this deep in the hole, many will simply try to avoid paying back the loan at all. This is definitely the wrong decision here, no matter what happens you should at least try to get in contact with your lender and try to work something out with them. Often you can strike up a payment plan with them to get the loans paid off over time.
What are the Consequences of Not Paying Back a Payday Loan?
There are several consequences you could face by not paying back your payday loan. By ignoring your loan, the lender will probably charge you extra non-sufficient funds fees when they try to cash your post-dated check. Besides the payday loan company’s fees, your own bank could charge you costly overdraft fees as well. Eventually, the lender will send off your debt to a collections agency, which will then call you and write you letters reminding you of your debt. Each agency is different, but some people have said that payday loan collections agencies can be more aggressive in their practice. Since the amount of most payday loans is around $500, collection agencies have more incentive to get it quickly so are known to call much more often and be more threatening than other types of debt collections. This can become an embarrassing situation as they’ll also contact your work place, references, and any other number they can get a hold of. Having a debt in collections can have an extremely negative affect on your credit score as well and although not all lenders will report the debt to a credit agency, they will report you as a non-paying customer to payday loan related tracking services. As far as legal consequences go, there have been payday loan companies in the past that have sued customers who haven’t paid for their loans. Usually they’re sued for purposely writing bad checks or some other type of fraud. Even though this type of charge won’t typically hold up in court, it’ll still end up costing you time and legal fees. While you may not face consequences like jail time for not paying back your payday loan, you’ll still have to pay back even more money and have to deal with collections agencies.